Pre- and Post-Employment Checks: The Devil is in the Details

By Philip E. Goss, Jr., Esq.

I believe we can all agree that pre-employment background checks are a good thing. They’re good for knowing if the prospective employee has any dark clouds that could affect her ability to perform the job in that she’s hired to perform. These checks are exceptionally good for determining if that person has any disqualifying events that could cause your school harm, things like any sex based adverse history or a criminal record.

It’s absolutely vital to prove that you took proactive steps to weed out someone who could commit any crimes against your student population, (again there’s that nasty issue of sex-based harassment or assaults). Background checks will not act to dismiss a case against your school, but they will act as an affirmative defense when faced with a negligent hiring or negligent retention lawsuit.

As with many things, conducting pre- or post-employment background checks is not the easy thing it seems that it should be. If you decide to make a background check a part of your employment process, (and I heartedly suggest that you do) you must strictly follow a series of steps.

The Consumer Financial Protection Bureau enforces federal legislation known as the “Fair Credit Reporting Act.” Consumer reports, whether for the extension of credit or employment, or seeking information regarding criminal histories, fall within this legislation.

First, any prospective employee(s) must execute a specific and separate authorization (not hidden in any other document or disclosure), reading that you may obtain a consumer report on them. Their execution of the authorization allows you to obtain the report. Most businesses use third-party entities that, for a fee, will prepare the consumer report.

If you’re satisfied with the report’s result and the hiring is made, nothing more, except filing the authorization documents in the employment file, need be done. However, if for some reason you don’t hire the employee, you have steps to follow, even if the report was not the main

reason. If it had the smallest amount of influence on your decision, you must report it.

You must provide the employee a copy of the relied-upon report, as well as a letter telling her that, based upon the information in the report, you will not be hiring her. This letter must also provide the individual the chance to correct any misinformation, thereby allowing you

the opportunity to review an accurate report.

While not specified in the law, I suggest that you give the individual seven business days to seek correction.

Finally, a three-page document identified as “A Summary of Your Rights Under the Fair Credit Reporting Act” (found at the FTC website) must also be provided.

If after the seven days you’re not presented with new information, send a final adverse letter. It must include the name, address and phone number of the agency you contracted with for the report.

Again, you must enclose the aforementioned three-page summary. You must also inform the individual that he/she has legal rights to contest the information. Finally, you must instruct them how to request a copy of the report directly from the agency that prepared the report.

These steps are also required for re-screening employees after hiring, such as in the case where employees may be eligible for a promotion, when a consumer report is used.

Choose your partner that screens employees wisely, because you and that agency can be sued for violations of the Fair Credit Reporting Act.

One final point: Federal law is the minimum standard that must be followed. A specific state can, and will many times, enact legislation more strict than set forth above. A state, however, cannot weaken the federal laws outlined in the Fair Credit Reporting Act. Therefore, be sure

to review your state’s law as well.

Attorney Phil Goss, Jr. welcomes any email comments or questions at [email protected] and will attempt to respond personally, time permitting.