April 18th, 2014
Two recent settlements announced by the Federal Trade Commission (FTC) drive home the point and serve as an important reminder that employment background screening is subject to the federal Fair Credit Reporting Act (FCRA).
You, as an employer, should understand how the FCRA relates to your employment screening program and ensure that your consumer reporting agency (CRA, background screening provider) is doing their part to keep you in compliance.
The settlements highlighted by the Commission involve companies that provided background information about individuals to employers, but allegedly failed to uphold their FCRA obligations.
In broad outline form, the FCRA requires CRAs to:
- Furnish information that is accurate and complete, and
- Investigate consumer disputes about the accuracy of information they provide.
What Employers Need to Know about the FCRA
When you run background checks through a company in the business of compiling background information, you must comply with the Fair Credit Reporting Act (FCRA). The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) enforce the FCRA. Read the rest of this entry »
April 16th, 2014
The intriguing results of a highly-publicized EEOC lawsuit highlight that if the EEOC is to win a judgment against an employer for disparate impact discrimination, it must use valid statistical methodology to prove “disparate impact”.
This case demonstrates why that will not be easy to do.
EEOC v Kaplan
The EEOC recently sued Kaplan Higher Education Corporation for “disparate impact” discrimination, alleging Kaplan’s use of employment credit checks causes it to disproportionately screen out more African-American applicants than white applicants, creating a disparate impact in violation of Title VII of the federal Civil Rights Act. The Commission attempted to establish this fact by using an expert witness analysis of a pool of background checks from one of Kaplan’s vendors.
Among the problems facing EEOC expert Kevin Murphy, was that Kaplan did not have racial identification in the applicant files, and without that, according to the courts, there was no way to demonstrate discrimination by disparate impact. Although he could try to reconstruct the racial identity of some of the applicants from other files, he had to develop a methodology to assign race to many of the applicants. This method, which was apparently invented by Murphy solely for this trial, was the pivot and end point of the case.
Read the rest of this entry »