"Legalities Of Pre-Employment Inquiries And Background Checks/References"

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July 16, 2018


1. Interviews

Many of the guidelines discussed in the preceding section pertaining to application forms also apply to pre-employment interviews. An employer should refrain from making legally prohibited inquiries during the interview process, including inquiring into protected class issues. Rather, the employer’s questions should be limited to obtaining job-related information necessary to evaluate the suitability of a candidate. To facilitate the process, the employer should consider developing an interview questionnaire and utilize it consistently for all candidates seeking the same or similar positions. As an alternative to relying upon one interviewer, a panel is often utilized to better achieve a balanced, objective and unbiased selection process.

Finally, it is important to properly manage applicant-interviews by keeping them “on track.” One problem that occasionally rears its ugly head is where the candidate voluntarily blurts out protected class information, such as age, disability, or the like. In such an event, the interviewer(s) should artfully steer the dialogue back to job-related information. In some cases, it may be prudent to verbally note that the information volunteered by the candidate is not pertinent to the selection process. (The employer may want to consider documenting the incident in a confidential internal memo).

2. References

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Employers are often reluctant to give references because of concerns of being sued for defamation. To make it easier to obtain reference information from an applicant’s current or prior employers, the prospective employer may want to consider having the applicant sign a consent form giving the prospective employer the authority to contact prior (or current) employers to obtain a reference. The form should not only give the applicant’s consent to the prospective employer, it should also be worded as a consent and request from the applicant for the former (or current) employer to give a candid assessment of the former (or current) employee. This will give the former (or current) employer a greater comfort level in providing a full reference. This consent form, which should also elicit a “hold harmless” acknowledgment from the applicant applicable to both employers, should be retained by the prospective employer along with the employment application for a period of one year in the event the applicant is not hired.

To foster freer communication between former, current and/or prospective employers (presumably to encourage employers to be less inclined to give only a “neutral” reference), the Florida Legislature enacted (and subsequently amended) Section 768.095 of the Florida Statutes. Section 768.095 provides former employers with immunity from civil liability for disclosing information regarding an employee to a prospective employer.

Section 768.095 reads as follows:

768.095 Employer immunity from liability; disclosure of information regarding former or current employees.—An employer who discloses information about a former or current employee to a prospective employer of the former or current employee upon request of the prospective employer or of the former or current employee is immune from civil liability for such disclosure or its consequences unless it is shown by clear and convincing evidence that the information disclosed by the former or current employer was knowingly false or violated any civil right of the former or current employee protected under chapter 760.

In light of this statutory language, each reference will require a situationby- situation analysis. Generally, any information provided should be factual and limited in scope. There are certain situations such as those involving violent behavior, threats of violence, and stalking that require particular care in relaying information to a potential or future employer. The employer should share the information, but must do so factually (i.e., “Jan threw a glass jar at John that cut John’s hand,” rather than stating “Jan is a jar-throwing lunatic”). Even performance issues may be explained. If information is disclosed, we recommend that objective evidence be available to support the disclosing employer’s statements to protect the disclosing employer’s position. Still, providing the information is necessary for the next employer to make an informed decision. Prior to releasing information regarding violent behavior (e.g., threats of violence, stalking behavior, etc.) employers should contact their labor and employment counsel for help in determining what information to impart and how it should be phrased.

Ensure that any references provide are truthful. As stated, providing false information about an employee can result in a lawsuit for defamation or “false light” against the employer. It is in the employer’s interest to include a statement in the employee handbook about the company policy on providing employee references and/or verifications of employment. The policy should also state who the authorized person is to provide references and verifications of employment and how such information should be requested, such as in writing on business letterhead or using a particular form provided by the employer. Employers should be cautious about responding telephonically to reference inquiries. Do you really know who the caller is? It could be a disgruntled employee’s friend calling to see what you will say. Can you be sure the reference you give will be relayed accurately?

In seeking information, the prospective employer should ask fact-specific questions relating to performance and conduct. Following are some guidelines and pointers for a prospective employer to consider when requesting references from the disclosing employer:

  • Train employees assigned to this task not to inquire into an applicant’s protected characteristics (e.g., race, disability, age, etc.).
  • Reference inquiries should also not attempt to elicit whether the applicant has filed legal claims, such as a worker’s compensation claim.
  • If the request is made by telephone, memorialize the reference obtained in writing, ensuring accuracy.
  • Develop a list of questions seeking objective information as opposed to subjective ratings for performance and attitude. If a former employer will not provide information concerning past performance of an applicant, inquire whether the individual is eligible for rehire. The answer or lack thereof may be illuminating.
  • If the disclosing employer states that the applicant is not eligible for re-hire, the applicant should be investigated further. Ask why. If no answer, then this should raise a red flag as well. You may then want to ask the applicant what happened that would result in such an answer.
  • Keep the information confidential, even if you allow employee access to personnel files.
  • Reference-check documentation must be kept for one (1) year after the record is made.

3. Florida Criminal Background Checks

Many employers in Florida contact the Florida Department of Law Enforcement (FDLE) to conduct a criminal background check on job applicants. Information is also available on its website – www.fdle.state.fl.us. This is a good first step. However, if an applicant has worked out of state, then the background check should encompass those states as well. If not, the employer may fail to obtain critical information about the applicant’s past that might bear on the employer’s decision whether or not to employ the candidate. If the applicant is a recent Florida resident, an employer may want to check the procedures for obtaining criminal background checks in the state(s) where the applicant used to reside.

As discussed below, conducting criminal background checks is mandatory in order to obtain the protection available under the Florida law regarding a “negligent hiring” claim. There is now arguable tension between this law and the recently issued EEOC guidelines relating to criminal history inquiries and suggested best practices (which include individual assessments of whether a criminal conviction should affect the hiring decision). The EEOC has been taking action against employers who do not conform to its recommended individual assessments.

In 2013, the EEOC filed suit against both Dollar General and BMW for their blanket use of background checks. The EEOC does not recognize that state laws sometimes require blanket background checks. For instance, in Florida not only is a criminal/background check required for the presumption that an employer’s hiring decisions are not negligent; but, in the healthcare and childcare industries, such checks are often statutorily required.

One federal court has already rejected the EEOC’s position. On August 9, 2013, in EEOC v. Freeman, a federal district court in Maryland dismissed an EEOC background check lawsuit. In that case, certain convictions generally disqualified a candidate from employment: those involving violence, destruction of private property, sexual misconduct, felony drug convictions, and job-related misdemeanors. The EEOC alleged that the company’s reliance on criminal background checks disparately impacted African-American and male applicants.

The court explained that proving the disparate impact of an employer’s policy or practice requires reliable and accurate statistical evidence—merely pointing out statistical disparities in an employer’s workforce is not enough. “[W]hile some specific uses of criminal . . . background checks may be discriminatory and violate . . . Title VII, the EEOC bears the burden of supplying reliable expert testimony and statistical analysis that demonstrates disparate impact stemming from a specific employment practice before such a violation can be found.” The court found that EEOC had failed in its burden of proof. The EEOC tried to make its case by using an expert’s report regarding disparate impact but the court slammed the report, describing its substance as “laughable,” “rife with material errors,” “completely unreliable,” “distorted,” “worthless,” cherry-picked,” and “an egregious example of scientific dishonesty.” After the court disregarded the EEOC disparate impact analysis, it had no credible evidence of disparate impact and dismissed the lawsuit. The court also criticized the EEOC for not identifying the specific aspect of the company’s policies that allegedly caused the alleged disparate impact—it is not enough to simply argue that a background check policy as a whole caused disparate impact. Moreover, the court criticized the EEOC’s recent push on background checks: “Careful and appropriate use of criminal history information is an important, and in many cases essential, part of the employment process . . . even the EEOC conducts criminal background investigations as a condition of employment for all employees[.]” The court criticized the two recent EEOC lawsuits and stated that, “[b]y bringing actions of this nature, the EEOC has placed many employers in the ‘Hobson’s choice’ of ignoring criminal history . . . thus exposing themselves to potential liability for criminal and fraudulent acts committed by employees . . . or incurring the wrath of the EEOC for having utilized information deemed fundamental by most employers.”

4. Fair Credit Reporting Act (FCRA) Compliance

It is essential, in light of the current business and legal environment, that employers make informed hiring decisions. Employers often engage third parties to conduct background investigations. One of the most common types of background investigation involves the use of “consumer reports” prepared by third parties. These reports implicate the FCRA. Under the FCRA, specific disclosures are required to be made to individuals who are denied employment based on a “consumer report.” A “consumer report” is defined by the FCRA, in pertinent part, as:

[A]ny written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for— . . . employment purposes. 15 U.S.C. §1681a(d)(1)(B). An “investigative consumer report” is defined as:

[A] consumer report or portion thereof in which information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on or with others with whom he is acquainted or who may have knowledge concerning any such items of information.

15 U.S.C. §1681a(e) (emphasis added).

If the employer itself performs a background check, then the background check is not covered by the FCRA. However, if the background check is performed by a third party, such as an employment or reference checking agency, then the reference is covered by the FCRA and relevant disclosures must be made where applicable. Any review of the applicant’s credit history that involves accessing an applicant’s consumer credit report is covered by the FCRA and requires the necessary disclosures.

The FCRA allows employers to obtain confidential consumer reports for “employment purposes,” which is defined to mean “for the purpose of evaluating [an individual] for employment, promotion, reassignment or retention as an employee.” 15 U.S.C. §1681a(d)(B) & §1681a(h). Thus, employers are almost always able to obtain a consumer report regarding an applicant for employment or a current employee.

Before an employer may obtain a consumer report, it must provide the job applicant or employee with a “clear and conspicuous” written disclosure of the fact a consumer report may be obtained for employment purposes. See 15 U.S.C. §1681b(b)(2)(A)(i). Additionally, the job applicant or employee must give written authorization (or consent) for the employer to procure the report. See 15

U.S.C. §1681b(b)(2)(A)(ii). A consent form used for this purpose must be separate from the employment application form. Employers who want to utilize “investigative consumer reports” are required to make certain additional disclosures. Within three days of first requesting the report, an employer must “clearly and accurately” disclose in writing to the employee or applicant the fact an investigative consumer report, including information regarding the applicant’s/employee’s character, general reputation, personal characteristics, and mode of living, whichever are applicable, may be obtained. See 15 U.S.C. §1681d(a)(1). This written disclosure must also include a statement informing the applicant or employee of the following: (1) his or her right to request a disclosure about the nature and scope of the investigation and (2) the fact the employer will disclose such information to the applicant or employee upon request within five days of receiving the request. See 15 U.S.C. §1681d (b).

Before taking any adverse employment action against an applicant or employee based in whole or in part on a consumer report, an employer must provide the applicant or employee with a copy of the consumer report and must also give him or her a written description of his or her rights under the FCRA called “Summary of Rights.” See 15 U.S.C. §1681b(b)(3)(A). Recent legislation transferred the enforcement powers over the FCRA from the Federal Trade Commission (FTC) to the newly created Consumer Financial Protection Bureau (CFPB). As a result, effective January 1, 2013, employers are required to revise their Summary of Rights forms provided to prospective and current employees.

The only change is to replace any reference to the FTC with the CFPB. There are no substantive changes to this notice. An employer is not required to provide an applicant a copy of an investigative consumer report. See 15 U.S.C. §1681d. If the employer engages in an adverse employment action (e.g., rescinds an offer of employment), based in whole or in part on any information contained in the consumer report, it must then provide the applicant or employee with the following:

  • Notice of the adverse action;
  • The name, address, and telephone number of the consumer reporting agency which furnished the report (including a toll-free telephone number if the agency compiles and maintains files on consumers on a nationwide basis);
  • Statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken;
  • Notice the applicant or employee has a right to obtain a free copy of the subject consumer report from the consumer reporting agency within sixty days of notice of the adverse action; and
  • Notice of the applicant’s or employee’s right to dispute the accuracy or completeness of any information in the subject consumer report with the consumer reporting agency.

See 15 U.S.C. §1681m(a).

An employer who fails to comply with the FCRA requirements risks civil liability to the subject applicant or employee for actual damages, including humiliation, mental distress, and injury to reputation as well as attorneys’ fees. See 15 U.S.C. §1681n and §1681o. If the failure is deemed to be “willful,” the applicant or employee may also recover punitive damages. See 15 U.S.C. §1681n (a)(2). If the employer obtains the consumer report from the consumer reporting agency utilizing false pretenses or knowingly without a permissible purpose, then it will be liable to the applicant or employee for actual damages or $1,000.00, whichever is greater. Finally, criminal liability, including fines and/or imprisonment up to two years, may be imposed, if the employer knowingly and willfully obtained the credit report under false pretenses. See 15 U.S.C.§1681q.

If you engage a consumer reporting agency to conduct background investigations (“vetting”) make sure they are prepared to provide the required notices to applicants and employees. Do not permit investigations for unauthorized reasons.


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