Warning! How Background Checks Can Get Your Staffing Agency in Big Trouble

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Background Founder/CEO Safe Hiring Solutions Co Founder/ CEO Violent Crime Detective Metro Nashville PD 2,600 clients Provide violence prevention training/ consulting:

U.S. Dept of Justice U.S. Dept of Defense U.S. Homeland Security Federal Law Enforcement Training Center National Sheriff’s Assoc Indiana Law Enforcement Training Academy Numerous State Attorney General Offices

Truth about background screening industry

Highly unregulated Historically low quality product/service

No standard of care Reliance on incomplete databases FCRA provides consumer protection but no

standard of care beyond up-to-date information Limit reporting to 7 years Alias names

Why Should You Be Concerned? Your Brand Reputation Legal Consequences Selecting the right screening partner critical We can provide integration to your systems

AND provide high quality checks & service

Best Practices in Background Screening

Core Criminal Package SSN Verification National Criminal Database National Sex Offender County Criminal Search

Additional Solutions BMV Records Federal Criminal Search Employment Credit Report Child Abuse Registry Employment Verifications Character Reference Checks eReferenceCheck

Due Diligence Negligent Hiring Doctrine:  If an employer hires someone

that they either knew or should have known was dangerous or unfit for a position and it was foreseeable that someone could have be harmed then they could be sued for negligent hiring. It is the "should have known" that creates problems for employers.   

Negligent Retention Doctrine:  If employer becomes aware or should have become aware of problems with an employee who demonstrated unfitness and employer takes no corrective action (investigating, reassignment or termination). It is not enough to just screen new hires.  Due diligence must be exercised in an ongoing safe workplace program.

4 Hot Button Areas in Background Screening

#1 “Ban the Box” Removes questions on application concerning criminal history Removes valuable integrity tool for employers who compare

screening reports against applications Theory-

Ex- offenders being disenfranchised Criminal history preventing opportunity to interview

Does NOT: Prevent asking about criminal history during interview Conducting criminal background checks

Numerous municipalities (Indianapolis studying) Several bills pending in state legislatures

#2 EEOC 2012-16 Strat Plan

EEOC approved 4/25/12 by 4-1 vote

Guidance effective immediately

No public comment Game plan for the EEOC

field offices

Guidance replaced:

1987 EEOC Policy Statement regarding conviction records Zero tolerance policies 3 pronged approach

1990 Policy Guidance on the Consideration of Arrest Records

Commissioner Constance Smith Barker Lone Dissenter…

“Utter lack of transparency” “Public has been intentionally

shut out of this process” Places a burden on business

owners Exceeds the authority for a

regulatory commission Not congress Not courts

Disparate Impact EEOC demonstrates the

employer’s facially neutral policy has disparate impact on a protected group

Burden is on employer to show policy is: Job related Consistent with business necessity

EEOC interested in who is being denied based on background check

Case law… Green v. MO Pacific

Railroad (1977) Zero tolerance

convictions 3 pronged approach

El v. SEPTA Murder 40 yrs ago Policy no violence 3rd Circuit Ct in favor of

SEPTA

Old Guidance…Employer could demonstrate Title

VII compliance by using 3 factors with background checks:

1. Nature & gravity of crime;

2. Time that has passed since conviction/completion of sentence; and

3. Nature of job held or sought

New Guidance

Now employers may satisfy Title VII by using internal policy if it is “narrowly tailored”

Not clear what this looks like Guidance references “targeted

screens” based on Green factors (3 prongs)

Allow applicant/employee to explain the circumstances of the conviction

Guidance list several considerations: Facts & circumstances

surrounding the offense or conduct Self reporting from candidate? How to verify?

Evidence candidate performed same type work, post conviction, with same or different employer with no incidents of criminal conduct

Employment or character references

Arrest records require further investigating….

Arrest alone should NOT be used to deny employment

Certain minority groups arrested at disproportionately higher rates

FCRA restricts reporting of arrest records to 7 yrs

Considerations…. Review criminal background screening

policies Use of arrest/ non-convictions Green 3 pronged test Zero tolerance policies

#3 Fair Credit Reporting Act Yes it does apply even if you don’t use credit info FCRA applies if you pay a 3rd party vendor like SHS Specific requirements:

Disclosure & Authorization (written or electronic)

If taking adverse action based in “whole or part” on a background screening report:

Pre-Adverse Action Letter, Copy of Report, Summary of Rights under FCRA

Adverse Action Letter

Willful Non- Compliance of FCRAHunter, et al v. First Transit

Inc. Failed to provide

disclosures to applicants BEFORE running background check;

Failed to follow two-step adverse action process when denied employment

$5.9 Million Settlement

Several recent lawsuits for FCRA violations Domino’s Pizza $2.5 Mil

Running checks without authorization Not providing Pre-Adverse Action information

HireRight Allegedly providing inaccurate information $2.6 million settlement

K-Mart $3 Mil for FCRA Violations

Selection of Screening Firm Critical

#4 Social Media Background Checks

Be careful….there can be legal implications: Discrimination- seeing protected information like

marital status, age, race, etc. Privacy- Yes even the internet has a reasonable

expectation of privacy since most sites require friending

Authenticity-How do you know it is your candidate? Common names?

Social Media Concerns How do you verify information? How do you know it is your candidate? How do you know that your candidate is not

operating online under an assumed identity? 21 states have restricted use of social media checks Congress HR 537 would make it illegal to ask for

social networking & email passwords

Questions?

Mike McCarty

CEO

Safe Hiring Solutions

Danville, IN 46122

317-745-6946

Mike.mccarty@safehiringsolutions.com

www.safehiringsolutions.com