The document outlines 4 steps companies should take to comply with background check laws and avoid lawsuits: 1. Use a stand-alone background check disclosure and authorization form, not one embedded in an application. 2. The disclosure form cannot include a liability waiver releasing the company from responsibility. 3. Send a pre-adverse action notification letter if background results may prevent hiring, along with the applicant's report and FCRA rights information. 4. If hiring is denied after dispute, send an adverse action letter with the report and FCRA rights again. There must be time between the pre-adverse and adverse notices.

1. 4 WAYS TO PROTECT YOUR COMPANY
FROM BACKGROUND CHECK LAWSUITS

2. 4 Steps to Background Check Compliance
100
Class action
lawsuits
Settlements 3 Large
Companies
14 million dollars

3. Disclaimer
DISCLAIMER
The information contained in this presentation is for
general information purposes only and should not be seen
as legal advice. The information is provided by U.S.
Information Search and while we endeavor to keep the
information up to date and correct, we make no
representations or warranties of any kind, express or
implied, about the completeness, accuracy, reliability, or
suitability of the information. Before making any decisions
you are advised to seek legal counsel.

4. 4 Steps to Background Check Compliance
Most lawsuits related to background checks have to do with
violations of what is known as the Fair Credit Reporting Act.
(FCRA).
There is a federal FCRA, that comes under the jurisdiction
of the Consumer Financial Protection Bureau and many
states have their own versions of the FCRA.

5. 4 Steps to Background Check Compliance
Step 1
Use a “stand-alone”
background check
disclosure and
authorization
Step 3
You must provide a Pre-
Adverse action
notification
Step 2
No liability release
Step 4
You must provide an
Adverse action
notification

6. Before the Background Check
Applicant sign a disclosure
and authorization form
Employer gives you a
permission to run the
background check for a
permissible purposes

7. Step 1 - to Background Check Compliance
The background check disclosure and authorization form must be a
separate document
A big reason for many lawsuits is that companies embed this document
inside of their employment application
The background check authorization and disclosure must be a stand-
alone document
Step 1
Use a “stand-alone” background check
disclosure and authorization

8. Step 2 - to Background Check Compliance
disclosure and authorization cannot have a statement where you are
asking the applicant to sign something that releases you from liability.
You must give the applicant an opportunity to see their report and an
opportunity to dispute it if they feel it is not accurate. Do not simply tell
them they are not hired because of the background check and refuse to
give them a copy.
The FCRA has a specific process know as The Adverse Action Process.
Step 2
No liability release

9. Provide them with a specific letter that basically says due to what was
found on their background check report, they may not be hired
Provide them with a copy of their report so they can see what was found
Provide them with a document from the Federal trade commission called
your rights under the Fair Credit Reporting Act
Step 3
You must provide a Pre-Adverse Action
Notification.
Step 3 - to Background Check Compliance

10. Step 4 - to Background Check Compliance
Step 4 says based on your report we are NOT going to hire you.
The adverse action letter is sent if they do not dispute the results or after
an additional investigation is completed the results stand.
With the Adverse Action Letter send another copy of the report and
another copy of their rights that under the fair credit reporting act.
Step 4
You must provide an Adverse Action
Notification.

11. What is the
time between
step 3 and
step 4?

12. THANK YOU
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