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Background Checks Under Fire: Policy Considerations to Avoid Discrimination Claims
 

Background Checks Under Fire: Policy Considerations to Avoid Discrimination Claims

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The EEOC, Congress, and many state legislatures are closely scrutinizing how employers use background checks, especially criminal histories and credit reports. This presentation will walk employers ...

The EEOC, Congress, and many state legislatures are closely scrutinizing how employers use background checks, especially criminal histories and credit reports. This presentation will walk employers through the process of preparing a background screening policy that helps ensure a safe and productive workforce while staying out of regulators’ and plaintiffs’ attorneys’ crosshairs.

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  • NathanielBrown, an Ohio State University custodian, shot and killed his supervisor, shot and wounded another boss and then killed himself with a single bullet to his head in March 2010. He lied on his application, failing to admit that he had spent five years in prison for receiving stolen property. The background check performed on Brown failed to identify the record. Ohio State’s policy would have prevented Brown’s employment as a custodian given his theft-related offense.
  • Jeffrey Hafling was hired by Adler Services, a subcontractor of the department store Burdines, while he was still on parole for various violent sex offenses. No background check was conducted. In February 2001, Burdines sent Hafling and James Perrigo (who had a conviction for breaking and entering) to Sue Weaver’s home to clean her air ducts. Six months later, Hefling returned to her residence where he raped, murdered, and, in an attempt to conceal his crimes, burned her house down.
  • Jose Diaz was hired as a temporary maintenance man for a Lufkin apartment complex. They didn’t run a background check on him and didn’t know that he was a convicted felon. His criminal history was discovered only after a resident awoke to find him in her bedroom trying to remove her shorts.
  • Ben Blount was an anthropology professor when he left the University of Georgia in Athens while being investigate for sexual harassment of female students. After landing a new position at the University of Texas at San Antonio, Blount was once again forced to resign his position after a sexual harassment investigation. The lesson: past performance is a strong indicator of future performance.
  • Stephen Robertson was a network administrator for Cinemark in Dallas, Texas. While there, a case was filed against him in Dallas County for illegally accessing and damaging the computer system of a former employer, Corgan Associates. He was given 5 years probation and Cinemark apparently never became aware of this case. When terminated from Cinemark, he illegally accessed Cinemark’s computer systems and deleted files, including a 60 GB PeopleSoft database and stopped several network services. He was sentenced to 41 months in federal prison and three years’ supervised release. According to LinkedIn, he is currently a contract computer programmer working on Lawson systems. Take away lessons: Always check with previous employers for references and check the backgrounds of contractors (even those not handled by HR).
  • BadHireDays.com has more cases studies about individuals with criminal histories who later brought injury to their employer or others – and how employers can avoid making the same mistakes.
  • Employees of NASA contractors working at Jet Propulsion Laboratories sued NASA when the agency changed the background check requirements to meet those of regular employees. The US Supreme Court ruled in favor of NASA and recognized the need for background checks, even those asking very invasive questions.
  • Many pro-union job seekers, and even union salts wishing to challenge an employers’ selection practices, “like” the AFL-CIO or Change to Win on their social media pages.
  • There have been a number of cases examined by the NLRB in relation to social media comments by employees. The NLRB's Acting General Counsel released a report in August 2011 that describes their approaches to these cases. In summary, if more than one employee is engaged in a social media conversation concerning their working conditions, the conversation is protected activity. If it is only a single employee airing grievances, it is not protected activity and is not protected. 
https://www.nlrb.gov/news/acting-general-counsel-releases-report-social-media-cases
  • Remember that many people who can’t get past employers’ background checks often work for temporary agencies or set up their own contracting or consulting businesses! HR and Procurement need to work together!

Background Checks Under Fire: Policy Considerations to Avoid Discrimination Claims Background Checks Under Fire: Policy Considerations to Avoid Discrimination Claims Presentation Transcript

  • Background Checks Under Fire:Employer Policy Considerations to Avoid Discrimination Claims
    Mike Coffey, SPHR
    PresidentImperative Information Group
  • Why Employers RunBackground Checks
  • Why Employers RunBackground Checks
    Jeffrey Hefling
  • Why Employers RunBackground Checks
    Michael Gilbert
  • Why Employers RunBackground Checks
  • Why Employers RunBackground Checks
  • Why Employers RunBackground Checks
    Stephen Robertson
  • Why Employers RunBackground Checks
  • Why Employers RunBackground Checks
    2009 National Retail Security Survey
  • Why Employers RunBackground Checks
  • The federal Fair Credit Reporting Act governs background checks.
  • Disclosure must be made and written authorization received.
  • Disclosure must be made and written authorization received.
    $5.9 Million
  • The employer must provide information prior to making an adverse decision.
  • The employer must provide additional notice after taking the adverse decision.
  • The FCRA limits what can be reported in background checks.
  • The FCRA limits what can be reported in background checks.
  • The FCRA limits what can be reported in background checks.
  • Sample State Consumer Reporting Laws
    Texas’ only restriction (limiting all information to seven years) was invalidated by the Fair and Accurate Credit Transactions Act (FACTA), though it is still widely quoted by attorneys and screening firms unfamiliar with the interplay of the state and federal laws.
  • Sample State Consumer Reporting Laws
    • The authorization and consent must contain a “box” for the consumer to check to receive a copy of the report.
    • Employers may not inquire about sealed records and applicants may state that they have no conviction
  • SampleState Consumer Reporting Laws
    • Employers may not consider non-conviction criminal information.
    • Convictions can only be reported for seven years (including murder, rape, arson, etc.)
    • Special protections for marijuana convictions and sex offenders.
    • Special notices to applicants when obtaining consent to procure background check.
  • Sample State Consumer Reporting Laws
    • Employers may not inquire about criminal records on the initial written application.
    • Time limits effective 2012:
    • Felonies: 10 years
    • Misdemeanors: 5 years
    • Murders, manslaughter and certain sexual offenses: no limit
  • Sample State Consumer Reporting Laws
    Many states have passed or are considering laws to limit employers’ use of credit reports.
  • National Labor Relations Act
    The National Labor Relations Act makes it illegal to refuse to hire a job applicant because he/she is a union member, or even a union organizer.
  • National Labor Relations Act
    The NLRB found that an employee’s negative comments on Facebook about a supervisor constituted “protected activity.”
  • Title VII of the Civil Rights Act of 1964
    Title VII of the Civil Rights Act of 1964
  • Title VII of the Civil Rights Act of 1964
    • Prohibits both intentional discrimination (“disparate treatment”) and seemingly neutral policies without business necessity that have adverse impacts on protected classes (“disparate impact” - see Griggs v. Duke Power)
    • Policies must have a manifest relationship to employment role with no viable alternatives to qualify as a business necessity
    • Heavily impacts employment qualifications, tests, and background checks
  • Title VII of the Civil Rights Act of 1964
    Criminal Records Brightline Rule:
    Have you ever been arrested?
    • No
    • Yes (please deposit your application in the trashcan on your way out)
  • Title VII of the Civil Rights Act of 1964
    When reviewing criminal records, an employer must consider:
    The relevance of the offense to the position, including severity and time passed since the offense
    The reasonable likelihood that the person committed the offense
    Disposition (final judicial outcome),though an indicator of relevance, is not the only issue!
    See EEOC Policy Statement on the Issue of Conviction Records under Title VII of the Civil Rights Act of 1964 and Policy Guidance on the Consideration of Arrest Records in Employment Decisions under Title VII of the Civil Rights Act of 1964
  • Protected Classes under Federal Law
    • Age
    • Race
    • Sex
    • National origin
    • Religion
    • Marital status
    • Disability
  • EEOC Activity
    • 99,922 charges filed in 2010 (20% increase since 2005)
    • E-RACE (Eradicating Racism and Colorism from Employment) initiative looks for systemic discrimination (disparate impact claims)
    • Expects 110K charges in 2011
  • EEOC Activity
    • 2011 stated goals:
    • improve enforcement initiatives,
    • reduce the backlog,
    • target systemic litigation, and
    • reinvigorate Federal Sector enforcement.
    • July 26, 2011- hearings on the use of criminal records in employment (“a new protected class”)
  • EEOC v. Freeman Companies
  • EEOC v. Kaplan Higher Education Corp.
  • EEOC v. PeopleMark
    $751,942
  • State EEO Laws
    Many states have their own equal employment opportunity or human rights laws.
    • Washington state will not allow employers to consider any criminal records older than ten years.
    • 6 states have “job-relatedness” requirements for the consideration of criminal records.
    • Texas has no such limitations.
  • Ban The Box Initiatives
  • Ban The Box Initiatives
    • Massachusetts: Employers may not inquire about criminal records on the initial written application.
    • Minnesota, Connecticut & New Mexico: Public employers may not inquire about criminal records on the initial written application.
    • Hawaii: Employer may inquire only after an offer of employment is made
    • More than 2 dozen cities have passed similar ordinances including Philadelphia (04/2011), Baltimore, Memphis, and San Francisco
  • Policy Considerations
    Smart employers will have polices in place before background results are requested.
    Always consult with your background screening partner and legal counsel before creating new policies in this area.
  • Policy Considerations: When to Run Background Checks?
    • Pre-offer
    • Upon contingent offer
    • Annually
    • Prior to promotion/job change
    • Return from extended leave
    • During investigations/ progressive discipline
    • “Rumor mill” allegations
  • Policy Considerations: Criminal Records
    The criminal history question posed to applicants (when compliant with state law) is an employer’s least expensive integrity test:
    “Please list all misdemeanor and felony criminal matters, other than minor traffic safety violations for which no arrest was made, in which you were convicted, served probation, participated in deferred adjudication or other program to avoid a conviction, or made restitution or participated in pre-trial diversion or other program to avoid prosecution.”
  • Policy Considerations: Criminal Records
    What is your policy about incomplete or inaccurate responses to questions on the employment application?
    Are applicants who fail to answer or lie on the application eligible for hire? If not, are they eligible for future consideration?
    What about pending cases? Warrants for arrest?
  • Policy Considerations: Criminal Records
    What kinds of criminal record sources are relevant:
    • County criminal records
    • State criminal record repositories
    • Multi-jurisdictional databases
    • Federal criminal records
    • International records
  • Policy Considerations: Criminal Records
    What jurisdictions will be searched:
    • County of residence
    • Those disclosed by the applicant (address history, previous employment locations, education locations, etc.)
    • Those identified in identity research
    • How far back? (7 years, 10 years, more?)
  • Policy Considerations: Criminal Records
    What names will be searched:
    • Current/former names disclosed by applicant.
    • Those identified in identity research.
    • What about “nicknames” (“Bob” for “Robert”)
    • How far back on previous names? (7 years, 10 years, all?)
  • Policy Considerations: Criminal Records
    What are the position-specific business risks:
    • Asset/information theft
    • Risks from unsafe/negligent conduct
    • Vulnerable coworkers, customers, others
    • Company reputation/branding risks
  • Policy Considerations: Criminal Records
    How might past behavior predict on-the-job behavior?
    =
  • Policy Considerations: Criminal Records
    Position-specific (or job class-specific) criminal offense guidelines (in line with state laws):
    Eligible for hire (Y)
    Management review of offense, time that has passed, and applicant’s whole picture (C)
    Not eligible for hire (N)
  • Policy Considerations: Criminal Records
    Title VII of the Civil Rights Act of 1964
  • Policy Considerations: Verifications
    Verification of qualifications and employment:
    • What to verify: all claimed by applicant or only those specifically required by the job description, regardless of applicant claims?
    • Ask about gaps in employment
    • At what point do discrepancies become falsehoods?
  • Policy Considerations: Credit
    The use of credit is being scrutinized closely:
    • What job-related insight into the applicant’s ability to perform the job duties do you hope to obtain from the credit report?
    • What will be your objective criteria for evaluating applicants’ credit reports (employment-related reports don’t show a credit score)?
    • Are you willing to be the EEOC’s next test case?
  • Policy Considerations: Social Media
    How will you avoid obtaining protected class information?
    See my full social media presentation at slideshare.net/mrcoffey
  • Policy Considerations: Adverse Action
    Document:
    • FCRA pre-adverse action communication on “management review” or “not eligible” scores before making a final decision.
    • Subsequent communications with applicant.
    • Reasons behind each “management review” decision.
    • Reason for any variations to guidelines.
    • FCRA post-adverse action communication.
  • Policy Considerations: Contingent & Contract Workforce
    How do you ensure the same “standard of care” when dealing with contingent and contract workers?
    Stephen Robertson
  • Questions?
    Mike Coffey, SPHR
    PresidentImperative Information Group
    coffey@imperativeinfo.com