Background Checks

No one would deny the importance of doing a thorough background check on prospective employees; but, if you’re going to do them, make sure you’re following the rules as specified by the Fair Credit Reporting Act.

Here’s what can happen if the rules aren’t precisely followed.  A few months ago Publix Super Markets agreed to settle a class action lawsuit alleging that it violated the FCRA to the tune of $6.8 million dollars!  Here’s what was reported: “The plaintiffs allege Publix violated FCRA by procuring background checks on employees and job applicants without providing a ‘stand alone’ disclosure informing them that a background check would be procured for employment purposes.”

What the foregoing amounts to is a release document and a disclosure document must be provided to every job applicant on whom the prospective employer intends to do a background check.  We take that to mean two separate documents: one which the candidate signs giving the prospective employer permission to do the background check – the release – and another document which the applicant also signs acknowledging that he or she understands that a background check will be conducted on him or her – the disclosure document.  Furthermore, the language of both documents must conform precisely to the language the FCRA requires for both documents.

There is some debate among employers about whether one or two pieces of paper are required for the release and disclosure language.  It is argued that, if the job applicant signs a single document twice, then that satisfies FCRA rules.  However, the phrase “stand alone” suggests to me that a second piece of paper is required for the disclosure document.

My non-legal advice is certainly to check with your corporate counsel; but, if it were me, I would put the two documents on two different sheets of paper – just to be on the safe side.  Which is cheaper, after all,  buying a few extra reams of paper or settling a class action law suit for a couple of million bucks?