Background Checks


Not that there aren’t enough rules for employers to follow already – another set that really shouldn’t be overlooked pertains to the denial of employment based on the results of a background check.  The Fair Credit Reporting Act sets out the steps that are supposed to be followed if an employer uses a “consumer reporting agency” (CRA) to conduct a background check on prospective candidates for employment.

If, for example, an employer has a court check done and, as a result, decides not to hire a candidate for employment, the first thing that the employer is supposed to do is inform the candidate of the result of the court check and provide that candidate the opportunity to refute the findings.  There are, after all, probably thousands of people with the name “Joe Smith.”  Some, one can presume, lead exemplary lives, while others may have a record of multiple felony convictions.  If the CRA report comes back showing those convictions for the wrong Joe Smith, fairness obviously dictates that candidate Smith should be given the chance to demonstrate that he’s not the Smith with all the convictions.

How can the “real” Joe Smith do that?  He can contact the CRA to dispute the findings.  The CRA is then required to investigate further to determine if the record being reported is a match to the real Joe Smith or not.  But the candidate Smith won’t get that chance if the employer makes an adverse hiring decision based on the flawed court check the candidate doesn’t know about!  Therefore, employers are bound by FCRA regulations to inform Mr. Smith of the prospect of an adverse hiring decision based on the information contained in that court check.

Historically, the most common way to differentiate one Smith from another was by their Social Security numbers; but some courts, for privacy reasons, redacted the Social Security number from the records because it has become too easy to steal someone’s identity if anyone can walk into the courthouse and gather a name, date of birth, and Social Security number from the public records and easily create a false identity.

Unfortunately, the burden is on the candidate to prove that he is not the convicted felon the court check turned up.  But that’s far better than losing a job opportunity simply because the employer accepted the report from the CRA and didn’t notify the candidate that its hiring decision was going to be based on that report.

Employers, therefore, need to be fully aware of their responsibilities as outlined in the federal Fair Credit Reporting Act.