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.

1. Background Checks
Under Fire:
Employer Policy
Considerations to Avoid
Discrimination Claims
Mike Coffey, SPHR
President
Imperative Information Group

2. Why Employers Run
Background Checks

3. Why Employers Run
Background Checks
Jeffrey Hefling

4. Why Employers Run
Background Checks
Michael Gilbert

5. Why Employers Run
Background Checks

6. Why Employers Run
Background Checks

7. Why Employers Run
Background Checks
Stephen Robertson

8. Why Employers Run
Background Checks

9. Why Employers Run
Background Checks
2009 National Retail Security Survey

10. Why Employers Run
Background Checks

11. The federal Fair Credit Reporting Act
governs background checks.

12. Disclosure must be made and written
authorization received.

13. Disclosure must be made and written
authorization received.

14. The employer must provide information
prior to making an adverse decision.

15. The employer must provide additional
notice after taking the adverse decision.

16. The FCRA limits what can be reported in
background checks.

17. The FCRA limits what can be reported in
background checks.
Reportability of Negative Information
Age < 7years Age > 7 years,
wages < $75K
Age > 7 years,
wages > $75K
Non-conviction criminal
cases
(dismissals, acquittals,
cases not prosecuted –
includes cases
dismissed upon
completion of deferred
adjudication)
Reportable
under federal
law
Not reportable
under federal
law
Reportable
under federal
law
Civil cases, liens,
judgments, credit items
Reportable
under federal
law
Not reportable
under federal
law
Reportable
under federal
law

18. The FCRA limits what can be reported in
background checks.
Reportability of Negative Information
Age < 7years Age > 7 years,
wages < $75K
Age > 7 years,
wages > $75K
Criminal cases ending
in conviction (guilty)
Reportable
under federal
law
Not reportable
under federal
law
Reportable
under federal
law
Age < 10 years Age > 10 years,
wages < $70K
Age > 10 years,
wages > $70K
Bankruptcy Reportable
under federal
law
Not reportable
under federal
law
Reportable
under federal
law

19. 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.

20. 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

22. Sample State 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.

23. 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

24. Sample State Consumer Reporting Laws
Many states have
passed or are
considering laws to
limit employers’ use of
credit reports.

25. 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.

26. National Labor Relations Act
The NLRB found that
an employee’s negative
comments on Facebook
about a supervisor
constituted “protected
activity.”

27. Title VII of the
Title VII of the Civil Rights Act of 1964
Civil Rights Act of 1964

28. 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

29. 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)

30. 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

31. Protected Classes under Federal Law
• Age
• Race
• Sex
• National origin
• Religion
• Marital status
• Disability

32. 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

33. 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”)

34. EEOC v. Freeman Companies

35. EEOC v. Kaplan Higher Education Corp.

36. EEOC v. PeopleMark

37. 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.

38. Ban The Box Initiatives

39. 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

40. 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.

41. 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

42. 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.”

43. 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?

44. 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

45. 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?)

46. 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?)

47. 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

48. Policy Considerations: Criminal Records
How might past behavior predict on-the-job
behavior?
=

49. 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)

50. Title VII of the
Policy Considerations: Criminal Records
Civil Rights Act of 1964
OFFENSE 0 - 3 YEARS
(0 - 36 MONTHS)
3 - 7 YEARS
(37 - 84 MONTHS)
7 YEARS +
(85 + MONTHS)
Alcohol Consumption/Possession Y Y Y
Alcohol Sale to Minor C C Y
Arson N N N
Assault/Battery/Domestic Violence (FELONY) N N C
Assault/Battery/Domestic Violence (MISD) C C Y
Auto Theft N N C
Burglary/Breaking and Entering/Burglar's Tools N N C
Child Abuse/Molestation N N N
Child Neglect/Child Endangerment (FELONY) N N N
Child Neglect/Child Endangerment (MISD) N C Y
Child Support Y Y Y
Computer Crimes C C C
Contributing to Delinquency Minor C C C
Credit Card Abuse/Fraud/Skimming N N N
Criminal Contempt C Y Y
Criminal Mischief/Damage to Property/Vandalism N Y Y
Disorderly Conduct C Y Y
Drug Possession/Drug Abuse/Poss. of Drug Paraphernalia (MISD) N C Y
Drug Sale/Distribution/Manufacturing/Felony Possession N N C
Embezzlement N N N
Evading Arrest/Failure to Identify as Fugitive/Fugitive C C Y
Failure to File Tax Return C Y Y
False Report C Y Y

51. 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?

52. 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?

53. Policy Considerations: Social Media
How will you avoid
obtaining protected class
information?
See my full social media
presentation at
slideshare.net/mrcoffey

54. 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.

55. Policy Considerations:
Contingent & Contract Workforce
How do you ensure the same “standard of care”
when dealing with contingent and contract
workers?
Stephen Robertson

56. Questions?
Mike Coffey, SPHR
President
Imperative Information Group
coffey@imperativeinfo.com