William J. Simmons, a Shareholder from Littler Mendelson, P.C., and Laura Randazzo, VP of Compliance at CareerBuilder Employment Screening explain recent trends in ban the box compliance, salary history compliance & FCRA class action. For more info. on employment screening visit https://cb.com/employmentscreening.

1. Ban the Box Laws, Salary History
Restrictions, Class Action Litigation, Oh My!
William J. Simmons
Laura Randazzo
January 18, 2018

2. Presented By
William J. Simmons
Shareholder
Littler Mendelson, P.C.
wsimmons@littler.com
267.402.3047
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Laura Randazzo
VP of Compliance
CareerBuilder Employment Screening

3. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
Agenda
1. Emerging Ban The Box Compliance Trends
2. Emerging Salary History Compliance Trends
3. Emerging FCRA Class Action Trends

4. Emerging
Ban The Box
Compliance
Trends

5. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• Most employers now understand
many jurisdictions across the
country “ban the box”
• Often missed are other
requirements that go beyond “ban
the box”
“Ban the Box”  “Fair Chance Act”

6. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• Some laws require special notice or posting
requirements
– E.g. – San Francisco – must provide notice of rights before conducting
check
– E.g. – Philadelphia – website posting requirement
– E.g. – SF, Phila., LA – if making statement about background checks
in pre-hire process, must include special language about considering
those with criminal histories
Special Notice/Posting Requirements

7. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• Some laws will not allow you to use form employment
applications with “disclaimers”
– E.g., New York City, Philadelphia, District of Columbia (informal
enforcement position)
Restrictions On Using “Disclaimer” Approach

8. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• Some jurisdictions require changes to pre-adverse
action process
– E.g., Individualized assessments mandated regardless of protected
characteristics in many jurisdictions
– E.g., New York City, Los Angeles Assessment Forms
– E.g., California and other jurisdictions’ requirements to specify
particular criminal records that concern the employer
– E.g., Philadelphia’s requirement of 10 business days, California’s 5+5
business day requirement
Changes to Pre-Adverse Action Process

9. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• New laws are passed all the time
• Evaluate whether your consumer reporting agency’s
pre-adverse action product meets your needs and the
local requirements
• If performing the process in-house, train responsible
personnel regularly and assign an in-house “SME” to
track developments
Managing the Headaches

10. Emerging
Salary History
Ban Compliance
Trends

11. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
Salary History Bans
Delaware
Oregon
California
City of San Francisco
Albany and New York City, NY
Philadelphia, PA
Massachusetts
Puerto Rico

12. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• Off-limits to ask a question on an employment
application or otherwise inquire about an
applicant’s prior compensation during the
hiring process.
• Employer may not rely upon prior salary
history (other than that volunteered by the
applicant – more to come) to decide whether
to offer employment or to set the salary the
applicant will make in the job.
Common Restrictions

13. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• None of the laws expressly prohibit this.
• Some of the laws expressly approve of salary
expectation discussions (DE, NYC, Phila.,
SF).
• For now, asking this question is a calculated
risk. Consider your business needs and
where you do business vs. the desire to “play
it safe”.
1. Can we ask what the candidate’s salary expectation is?

14. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• Most laws will prohibit this.
• NYC and SF have narrow exceptions; can ask about
“unvested equity or deferred compensation that an
applicant would forfeit or have cancelled by virtue of
the applicant’s resignation from their current
employer.”
• Consider, rather than asking about amounts, more
targeted questions that get to the root of the issue –
did the applicant meet his or her
targets/goals/quotas; was he or she successful?
2. Can we ask questions about stock/bonus vesting
amounts/schedules?

15. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• CA is the only law that requires that an employer provide
the "pay scale” of the position.
• For some jobs there may only be one pay rate: Forklift
driver – $13 per hour. If you've been driving the forklift
for a week, or year, or 20 years, the rate is $13 per hour.
• Most jobs, however, there are a range of possible wage
rates.
• At a minimum, employers should provide consistent
information to all job applicants about the pay scale.
3. How do we respond if someone asks me for the salary range?

16. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• Laws vary in how to address “voluntary” disclosures.
• Unlikely any “safe harbor” language to use to
prompt a disclosure while keeping it “voluntary”.
• In hindsight, almost any “voluntary” disclosure will
be subject to scrutiny.
• Consider documenting that the applicant
volunteered. Consider not recording the $
information itself to avoid misuse.
• Some laws do say information can be used to set
salary if volunteered (CA, NYC, Phila., SF) –
exercise caution.
• DO NOT use the information to reject the candidate.
4. How should I respond if a candidate voluntarily
discloses their salary info?
$

17. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• Employers should assume that recruiting agencies, temporary
agencies, consumer reporting agencies act on their behalf.
• Some laws provide a “safe harbor” if the vendor is instructed not to
provide the information (DE) or passes along the information
incidental to confirming other non-salary information in a
background check (SF).
• Consult with your consumer reporting agency to discuss your
approach to these laws.
5. Can a third party ask the candidate for their salary history? What
happens when/if the third party shares this info with me?

18. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• The laws are generally ambiguous on coverage in these
situations. (Exceptions: Phila. Regulations, SF, which
narrow to jobs in the city).
• This is something that may be sorted out in the courts in
years to come.
• To be on the safe side, you may want to assume that bans
apply based on location of candidate’s residence or job.
• Consult your consumer reporting agency to ensure you are
both on the same page about the approach that is used.
6. Do the laws apply to positions that
are in the field/out of state?

19. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
• None of the laws specifically address or prohibit the
“disclaimer” approach. Compare with some “ban the box”
laws where the practice is expressly prohibited.
• Because laws are new, regulatory agencies have yet to
comment.
• If using a disclaimer, consider methods to make it as
prominent as possible (larger font, bold, etc.) (“If you live in
or the job you are applying for is located in . . . )
• The more laws that are passed, the greater degree of
difficulty using a disclaimer as it can become cumbersome
and potentially ineffective.
7. Can we use a “disclaimer” on written materials?

20. Emerging FCRA
Class Action
Trends

21. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
Disclosure World Still Unclear
Potential Willful Violation –
Potential $Millions in
Automatic (Statutory) Damages
Violation, But Not Willful
No Statutory Damages
(Oh But Wait . . .
Actually It Is “Willful”)
Lawful form
No Damages, No Liability

22. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
Other Trending Disclosure Theories
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• “Release of Liability” and so-called
“Implied Release of Liability”
• State law notices combined with
general disclosure in the same
“document”
• Special DOT “trucking” provisions
• Anything else you (they) imagine!!

23. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
Trending Pre-Adverse Action Theories
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• Verbal notice to candidates
• Lack of so-called “bona fide” pre-
adverse action process
• Time between candidate’s
“receipt” of letter and action too
short
• Computer glitches/systems
undermining program

24. © Littler Mendelson, P.C. | 2017 Proprietary and Confidential
Recommendations
– Consult legal counsel on review of forms; do
not use “set and forget” approach
– If you use a consumer reporting agency for the
pre-adverse action process, ensure you
understand the options
– Consider conducting yearly audits to ensure
process is working as expected
– Consider training “on the ground” staff

25. Questions
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