It’s “What’s Up? Wednesday”. Time to talk about BACKGROUND CHECKS . . .

You asked: “Do we need a special consent form to run background checks on applicants?”

Laura answers:  The practice of running pre-employment background checks continues to stir up controversy for some employers. Though the need for them is undeniable (a school does not want hire a teacher with a record of crimes against children, nor would any company want an accountant that has been convicted of fraud), it is the execution of these checks that is landing some companies in court.

Most recently, for example, Whole Foods, Inc. was hit with a class action lawsuit claiming that its hiring practices violate the Fair Credit Reporting Act (FCRA) – and it all boiled down to one little consent form. The lawsuit contends that the background check authorization form Whole Foods has used since January of 2009 did not meet FCRA requirements and was, therefore, invalid. The lawsuit seeks damages of up to $1,000 for each individual for whom Whole Foods obtained a consumer report without “valid authorization”.

The FCRA requirements include the need for a dedicated notice to applicants and employees that a background check may be run. The applicant or employee must then give written authorization allowing the employer to pursue that information. All of this can be accomplished with one, simple stand-alone authorization form. Whole Foods is in trouble because their form included additional language that would free the company from any liability related to that background check along with a disclaimer that the application did not create an employment contract, among other things.  In this case, you must keep it simple!

If your company is running background checks on employees or applicants, make sure you are obtaining the proper authorization with a dedicated form that meets FCRA requirements. Remember, too, that the FCRA also requires employers who deny employment or retention based on information in the report to provide a copy of the report and a “notice of rights” to that applicant/employee. This should include contact information for the company that made the report.

If you have any questions about background checks or any other human resources issues, please send an email to hrhelpline@eastcoastrm.com. We will be happy to help!

Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this web site does not create an attorney-client relationship between East Coast Risk Management or our employment attorney and the user or browser.

This entry was posted in Human Resources and tagged , , , , , . Bookmark the permalink.