As if We Need Another Reason for Employment Background Checks…

February 8th, 2012

The recent killing of a North Carolina store manager and her unborn child shines a bright light on the risks employers take when they fail to conduct a proper employment background check.

The alleged story goes like this: Around two months after being released from a two-year prison stay for felony robbery and breaking and entering, 22-year-old Mark Anthony Cox robs the store where he was recently hired to work and kills the store’s pregnant 25-year-old manager. The owners of the store did not require a background check on Cox that would have revealed his prior felony. What’s more, in North Carolina businesses aren’t allowed to hire felons convicted in the last three years for jobs that involve serving alcohol, as this job allegedly did.

Why the Failure to Perform Employment Background Checks?

Stories like this beg the question of why. Why is it that 90% of mid-size and larger U.S. corporations perform background checks while, according to some statistics, just 20% of smaller companies take this step? Why don’t more small businesses conduct pre-employment background checks on their applicants? Here are 5 excuses we hear all-too-often and our responses to each.

Some Say: Background screening is too expensive.

We Say: What’s expensive is losing a negligent hiring lawsuit at an average of $1M in damages. Employers lose more than 70 percent of negligent hiring lawsuits. In contrast, the price of a comprehensive background check averages just $45 and can even go as low as $10 for a basic check.

Some Say: Background checks are too time-consuming.

We Say: Today’s background screening companies offer web-based systems that allow you to quickly order background checks, obtain necessary applicant consents, and review the results within as little as 24 hours. Some reports are even available instantaneously.

Some Say: Employment screening is too complicated.

We Say: It doesn’t have to be. When you work with a qualified professional background check provider they’ll help you select the right background checks for each position in your company, they’ll set up a web-based ordering system where your orders and results are just a few clicks away, and they’ll even help ensure your compliance with applicable rules and regulations. If you choose the right employment screening provider, running a background check can be as easy as entering your applicant data and pressing a button.

Some Say: We have been in business for 5, 10, 15, 20 years without doing background checks and everything has been fine.

We Say: It’s not a matter of if; it’s a matter of when something bad will happen to your employees, your customers, your business, or a member of the public when you hire the wrong person. Whether your business is victimized by employee theft or your customers are endangered by the actions of an employee you shouldn’t have hired, the damage to your reputation, your brand, and your business are hard to measure. We’re not saying that a background check is the end- all be-all solution to your business risks, but employment background checks are a simple step you can take to improve your odds.

Some Say: I’m a good judge of character.

We Say: We’re guessing the owner of Flying Biscuit Café would have had this same excuse just hours before the mishap at his store. The unfortunate truth is that it’s very difficult to eliminate a candidate you like when your first impression is positive. It’s just not in our nature to second guess our own instincts. That’s why background screening should be a required part of your hiring process – to protect yourself from your own subjective judgments.

We say, let the excuses rest and give a long thought to how your brand, your profits, and your people could be impacted by the wrong hire. Risk management starts with people, and selecting the right people requires the objective data of employment background checks.

Let us show you how to build a simple, affordable, and accurate background screening program for your company. Request a free initial consultation or download our price and services guide.

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Posted by on February 8, 2012 | Comments (0) | Trackbacks

Domino’s Pizza and Capital One Taking Heat from Alleged FCRA Violations

February 2nd, 2012

Law firm Nichols Caster announced last week that former Domino’s Pizza employees will be allowed to proceed with putative class action against the company for alleged background check violations. According to the Nichols Caster press release, the United States District Court denied Defendant Domino’s Pizza’s motion to dismiss the case of Singleton, et al., v. Domino’s Pizza, LLC, ruling that the plaintiffs properly alleged that Domino’s violated the Fair Credit Reporting Act.

The two plaintiffs in the case allege that they were terminated from Domino’s based on undisclosed information in their background checks that was never shared with them by the company.

Domino’s alleged FCRA violations include:

(1)running background checks on employees without proper authorization; and

(2) “systematically” failing to provide employees with copies of their background checks prior to taking adverse employment action against them.

The Court went so far as to rule that the plaintiffs properly alleged that Domino’s violations were “willful.” According to the Court, “Domino’s fail[ed] to show that its interpretation of [FCRA] was ‘not objectively unreasonable.’”

Nichols Caster recently initiated a similar case against Capital One for FCRA violations. In this case, the lawsuit alleges that Capital One’s authorization form is flawed and that Capital One failed to provide copies of the background reports when it used them to take adverse employment actions.

How Can You Avoid FCRA Violations?

When you use consumer reports to make employment decisions, including hiring, retention, promotion or reassignment, you must comply with the Fair Credit Reporting Act (FCRA). The FCRA is enforced by the Federal Trade Association and applies to companies who use third party consumer reporting agencies (background screening companies) to perform their employment background checks.

There are FCRA requirements that must be followed before you get a background check, before you take an adverse action, and after you take an adverse action.

Learn more about these requirements in our recent blog post, “Following FCRA Regulations is Smart for Employers.”

We encourage all employers to carefully review their employment screening policies and programs to ensure their ongoing compliance with the FCRA. Consult both your employment attorney and your background screening company. At Proforma, we offer FCRA compliance support to assist in your ongoing compliance.

We are happy to discuss your employment screening program. Request a free initial consultation today.

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Posted by on February 2, 2012 | Comments (0) | Trackbacks

It Ain’t Over ‘Til the Church Lady Steals a Million Dollars

February 2nd, 2012

If a little ‘ole church lady would embezzle a million dollars from the Roman Catholic Archdiocese of New York what makes you think the seemingly nice person you just hired won’t do the same or similar to your business? In the words of the Dana Carvey version, “Isn’t that just special”!

The New York Times reported on January 30, 2012 that Anita Collins, age 67, was charged with embezzling more than $1 million over seven years from the archdiocese.

While the Archdiocese does perform background checks on workers today, when Anita Collins was hired 8 years ago, a criminal background check was not performed. As a result they made what can only be described as a very costly mistake. According to the Times story, shortly before she was hired by the Archdiocese, she was on probation after pleading guilty to grand larceny for fraudulent acts performed while acting as a payroll clerk for a staffing agency. The Times goes on to say that prior to this in 1986, she was arrested on multiple counts of forgery, and ultimately convicted of a Class A misdemeanor. Applying for a finance job where there is no background screening requirement, “how Conveeeenient”!

When it comes to hiring workers, ‘faith’ just doesn’t cut it.

Every time we hear a story like this we have to stop and ask ourselves why an organization of any type would fail to check the background of someone who will be trusted with finances. Moreover, we would question the failure to perform some type of background on any worker, regardless of their position, considering employers have a legal ‘duty of care’ in the hiring process. Relying on blind faith, trust, luck, or anything other than facts is a practice that needs to be put to rest once and for all.

Too frequently, it is in hindsight that organizations discover the classic definition of a fraudster is personified by a trusted employee. Furthermore, the case of the church lady points to the broader risk management requirements of organizations that rely on the trustworthiness of people. If money talks, a case like this should have companies running to sign up for employment screening services and to secure the services of a risk management consultant to ensure proper controls are in place to avoid the losses that can occur when the wrong people are placed in a position of trust.

If you are concerned about the people you hire or the financial controls in place at your organization, we invite you to consult with a background screening expert here at Proforma Screening Solutions or with our partners at L&A, a risk management consulting firm.

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