Background Checks and Other Pre-Employment Inquiries

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July 20, 2018


A. Background Checks: Many employers choose to conduct background checks to find out more about prospective employees prior to hiring them. It is important that employers comply with the legal requirements when doing these background checks. In addition, employers should consider background checks for certain job positions, such as those that require direct contact with the public, caring for children, the elderly or disabled, employees who will drive as part of their job duties or operate heavy machinery, employee who will work in remote locations with little supervision, and so on. Failure to conduct background checks in certain situations can lead to potential claims of negligent hiring. Negligent hiring is a claim made by an injured party against an employer based on the theory that the employer knew or should have known about the employee's background which, if known, indicates a dangerous or untrustworthy character. Pre-employment background checks, employee drug testing, and employment physical exams are some of the ways negligent hiring claims can be avoided For example, in the case of Smith v. Orkin, 540 So.2d 363 (1st Cir. 1989), a female customer hired the company to provide exterminating services for her home. The company sent one of its employees to the individual's home. While the employee sprayed the home, the employee unlocked a window to ensure access to the home when the employee returned. The employee returned to the individual's home and raped her while her children were present in the home. The court held that the company's negligence was the cause-in-fact of the individual's injuries. The court noted that the company had a duty to exercise reasonable care in the hiring and retention of employee's sent to customer's homes. The court held the company breached its duty when it failed to properly administer its chosen method of providing such security, a polygraph examination. Of the 74 questions asked, all but 6 had little to do with protecting the customers. The six questions were calculated to find out if the employee had stolen or if he was a drug abuser. The company's lack of care in the examination was demonstrated by the fact that the employee had been arrested for burglary and had raped another company customer.

B. Laws Applicable to Background Checks and Other Pre-Employment Inquiries Fair Credit Reporting Act. One law governing the conducting of background checks is the Fair Credit Reporting Act. The FCRA is a broad statute and it applies to, among other things, an employer's use of an outside agency to obtain information (called "consumer reports") relating to an applicant's or employee's "character, general reputation, personal characteristics, or mode of living." Thus, the FCRA may apply when an employer seeks to obtain information from an "outside agency" about an applicant's or employee's credit history, criminal background, motor vehicle record, worker's compensation history, or drug test status (including positive drug or alcohol testing results). The FCRA's definition of "outside agency" is broad and is not restricted to commercial credit bureaus. Any third party who – for a fee or on a cooperative nonprofit basis – provides information about an applicant or employee, is treated as a provider of consumer reports. Thus, an employer's use of any outside agency to obtain information regarding an applicant or employee will trigger the employer's obligations under the FCRA.

A pertinent exclusion from FCRA coverage is "any report containing information solely as to transactions or experiences between the consumer and the person making the report. . ." 15 U.S.C. § 1681a (b) (A). This transactions and experiences exclusion exempts from coverage any report based on the reporter's first hand experience of the subject. Consequently, if an employer consults directly with a parish sheriff's office to obtain a criminal history report, the report would not be covered since it would be based on the office's own experience with the employee. However, if the employer utilizes a third party to obtain the sheriff's report, the report and third party would be covered. It is important to follow the FCRA requirements when obtaining consumer reports. Before requesting any consumer report, employers must:

(1) Obtain written authorization from the individual. Get a written authorization from the applicant or employee to procure the consumer report.
(2) Provide written disclosure to the individual. Send a clear and conspicuous written disclosure statement to the applicant or employee indicating that the employer intends to obtain a consumer report for employment purposes. The disclosure must be set forth in a separate document consisting solely of the disclosure.

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Before obtaining the consumer report, employers must provide certification of compliance to the agency.

Employers should certify to the outside agency that (a) the above steps have been followed; (b) the information being obtained will not be used in violation of any federal or state equal employment opportunity law; and (c) if any adverse action is going to be taken based on the report, a copy of the report and a summary of rights will be provided to the applicant or employee.

Employers' Obligations When Using a Consumer Report to Make an Adverse Decision

Employers who rely on a consumer report in any way, even if only partially, to make an adverse employment decision, are subject to the following additional obligations under the FCRA.

Before using the consumer report to make an adverse decision, employers must provide written information to the individual.

Send the applicant or employee (a) a copy of the report; and (b) a description in writing of her or his rights under the FCRA. The Consumer Financial Protection Bureau has promulgated a summary of these rights, which is available at http://www.seyfarth.com/dir_docs/publications/FCRA.pdf

Although this requirement is designed to allow an applicant or employee an opportunity to explain unfavorable information contained in the consumer report prior to an adverse action being taken, the FCRA does not require the employer to consider any such explanations in making its decision.

After using the consumer report, employers must provide written explanation to the individual.

If an employer uses a consumer report, in whole or in part, to make an adverse employment decision, the employer should provide in writing the applicant or employee with:

(1) notice of the adverse action;
(2) the name, address, and telephone number (including a toll-free number, if available) of the agency that provided the report;
(3) a statement that the agency did not take the adverse action and is not able to explain why the decision was made;
(4) a statement setting forth the applicant or employee's rights to obtain free disclosure of their file from the agency if the individual requests the report within 60 days; and
(5) a statement setting forth the applicant or employee's right to dispute directly with the agency the accuracy or completeness of any information provided by the agency.

Equal Employment Opportunity Laws. Employers should exercise care in making decisions based on the results of background checks. Both under Louisiana and federal antidiscrimination laws, employers must not discriminate against individuals in making decisions based on the results of background checks. All of the major laws that prohibit discrimination in the workplace apply to the pre-employment and employee selection process. These include, for example, Title VII of the Civil Rights Act of 1964, as amended, Age Discrimination in Employment Act, and Americans with Disabilities Act and similar state laws. Most major laws that provide employees with protection for other employment purposes prohibit retaliation in future employment for filing a claim under those statutes. These include for example, workers’ compensation and unemployment compensation laws.

The Equal Employment Opportunity Commission recently issued The United States Equal Employment Opportunity Commission (the "EEOC") recently issued an updated "Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964" (the "Guidance"). The Guidance restates the EEOC's position that, although Title VII does not protect individuals with criminal records as a class, an employer must avoid making discriminatory decisions when relying on arrest and conviction records in making employment decisions. This is a particular concern as to race and national origin discrimination.

The EEOC Guidance provides recommendations and best practices for employers to follow:

1. Job Application Questions: The EEOC does not outright ban asking whether an applicant has been convicted of a crime on an application, but does strongly discourage this practice. If an employer chooses to ask about criminal convictions, it should ask only about convictions that are related to the job in question and consistent with business necessity.

2. Decisions Cannot be Made on Arrest Records Alone: The EEOC does not want employers excluding applicants based on an arrest record alone. According to the EEOC an arrest does not establish that criminal conduct actually occurred. The EEOC does allow, however, employers to make an employment decision based on a review of the conduct involved in the arrest if it is relevant to the employment position. For example, the Guidance recognizes that a school teacher arrested for inappropriately touching students may not be qualified for his or her employment and may be subject to termination if an independent investigation conducted by the school supports the discharge decision. According to the EEOC, such a termination would not violate Title VII because the decision is based on the underlying job-related conduct, not the arrest.

3. No Bright-Line Policies: The EEOC takes the position that blanket policies excluding all applicants with criminal conviction records violate Title VII. Employers should conduct an individualized assessment of each employee or applicant, considering the nature of the crime, the time elapsed since the conviction, and the nature of the job held or sought. The EEOC also recommends that employers study recidivism rates to determine whether a particular conviction should be considered, rather than rely only on generalized concerns.

4. Conduct Individualized Assessments: The EEOC goes further with its recommendation that employers conduct individualized assessments. According to the EEOC, an employer should (a) inform the individual of his/her exclusion based on a criminal record, (b) provide the individual an opportunity to demonstrate that he/she should not be excluded, and (c) consider whether the individual assessment shows that the exclusion policy should not be applied. The Guidance lists the following factors that employers should consider as part of an individualized assessment: the facts and circumstances surrounding the criminal offense, employment or character references, and any evidence that the individual performed the same type of work postconviction without incident.

5. Compliance with State Law is not a Defense: Employers who exclude applicants from employment based on federal law have a legitimate defense to any claims of discrimination.

However, employers how make the same decisions to comply with state law do not have a legitimate defense, unless the employer can show that the exclusion of an applicant is job-related and consistent with business necessity. This policy statement puts some employers in the position of deciding whether to comply with state or local law or face potential Title VII liability.

6. Confidentiality: The EEOC advises employers to take steps to make sure any criminal information obtained about applicants or employees is kept confidential. The EEOC also advises employers to train managers and decision makers as to the appropriate use of criminal background records.

Although the EEOC’s Guidance is not legally binding, the EEOC intends to rely on it to enforce Title VII. It remains to be seen how the courts will treat the Guidance. For this reasons, employers should take care in implementing criminal background checks in the workplace.

Uniform Guidelines for Employee Selection Procedures (Uniform Guidelines): The EEOC has issued these guidelines that govern all govern all selection procedures in the employment context. Selection procedures must be non-discriminatory from a disparate treatment and a disparate impact perspective. The Uniform Guidelines issued by the EEOC provide complex rules for determining whether a particular test or procedure is reliable and valid.

As to a “test,” it must be reliable, meaning consistent. Without consistency test results may vary between applicants, groups and/or raters to the extent that test results may not be deemed reliable. A test must also be valid. Validity means accuracy. In other words, did the test measure for what it intended to test?

Although the Uniform Guidelines govern all selection procedures, some of the more formal procedures that employers may choose to use are:

- Cognitive Ability Tests: These tests, commonly referred to as IQ tests, measure intelligence.
- Physical Ability Tests: These tests measure strength, endurance, muscle movement, etc.
- Aptitude Tests: These tests measure the ability of an individual to learn a new skill.
- Personality Tests: These tests are psychological tests that measure an individual’s basic characteristics, attitudes, emotions, interests, personal skills, and motivations.
- Honesty/Integrity Tests: These tests are designed to measure a person’s potential for negative behaviors such as lying, stealing, cheating, taking drugs, etc.
- Substance Abuse Testing: These tests are intended to provide employer’s information about the current use of drugs or alcohol.

Americans with Disabilities Act. The Americans with Disabilities Act governs when medical examinations and questions about an individual’s disability may be asked during the pre-employment process. Before a job offer is made, it is unlawful to ask an applicant whether she is disabled or about the nature or severity of a disability or to require the applicant to take a medical examination. An employer may ask an applicant questions about ability to perform job-related functions, as long as the questions are not phrased in terms of a disability or ask an applicant to describe or to demonstrate how, with or without reasonable accommodation, the applicant will perform job-related functions.

After a job offer is made and prior to the commencement of employment duties, an employer may require that an applicant take a medical examination, if everyone who will be working in the job category must also take the examination. The job offer may be contingent on the results of the medical examination. However, if an individual is not hired because a medical examination reveals the existence of a disability, the employer must be able to show that the reasons for exclusion are job related and necessary for conduct of the business and that there was no reasonable accommodation that would have made it possible for the individual to perform the essential job functions.

Once an applicant is hired, an employer cannot require a medical examination or ask an employee questions about disability unless it can show that these requirements are job related and necessary for the conduct of its business or are necessary to determine whether an employee needs a reasonable accommodation.

An employer may conduct voluntary medical examinations that are part of an employee health program. The results of all medical examinations or information from inquiries about a disability must be kept confidential, and maintained in separate medical files. When taking into account health and safety considerations when making employment decision, the ADA permits an employer to require that an individual not pose a direct threat to the health and safety of himself/herself or others in the workplace. A direct threat means a significant risk of substantial harm. An employer cannot refuse to hire or fire an individual because of a slightly increased risk of harm to himself or others or based on a speculative or remote risk. The determination that an individual poses a direct threat must be based on objective, factual evidence regarding the individual’s present ability to perform essential job functions. If an applicant or employee with a disability poses a direct threat to the health or safety of himself or others, the employer must consider whether the risk can be eliminated or reduced to an acceptable level with a reasonable accommodation.

Drug and Alcohol Testing Issues: The Department of Transportation (DOT) regulations require certain forms of testing by covered employers of covered employees. These regulations are administered by each individual agency, and the requirements of each agency are different, but many agencies require pre-employment testing.

Comprehensive regulations exist for the following types of employees:

- Commercial motor: Commercial drivers license holders, drivers for motor carriers. 49 CFR Parts 382 and 391.
- Railroad: 49 CFR Parts 217, 219, and 225.
- Mass transit: 49 CFR Part 653.
- Pipeline: 49 CFR Part 199.
- Maritime: 46 CFR Part 16.
- Aviation: 14 CFR Parts 61, 63, 65, 121, and 135

When conducting any drug and alcohol testing, employers should act in a nondiscriminatory manner. The employer should be fair and consistent in implementing the policy.

Particularly, the employer should not implement the policy in a way that discriminates against anyone based on race, religion, national origin, sex and so on.

In addition, the employer should follow the requirements of the Americans with Disabilities Act (ADA), as discussed above. Drug tests are not considered medical exams. Therefore, they may be conducted at any stage of the selection process. Alcohol tests are considered medical exams and may only be conducted after a conditional offer of employment has been made.

In addition, under the ADA, employers can terminate employees for current use of alcohol or drugs, but the following employees are in a protected class:

- Former drug/alcohol users who have successfully completed a supervised drug rehabilitation program or have otherwise been rehabilitated successfully and no longer use drugs

- Participants in a supervised rehabilitation program, if no longer using drugs or alcohol. Those employees erroneously regarded as using illegal drugs. Under the ADA, employers can:

- prohibit employees from possessing, using or being under the influence of alcohol or illegal drugs on the job or in the workplace

- test for illegal drug use and attach disciplinary consequences for those who test positive

- take disciplinary action based on other demonstrations of current illegal drug use

- hold employees who use drugs or alcohol to the same performance standards as required for other employees, even if substandard performance is related to drug or alcohol use or abuse

The Louisiana Drug Testing Statute at La. R.S. 49:1001 et seq. sets out procedures that virtually every employer, public and private, must follow. The statute covers testing for five drugs only – marijuana, cocaine, phencyclidine (PCP), heroin, amphetamines. The statute does not cover testing for alcohol. The statute does not require or prohibit any type of testing for private employers. Thus, the statute applies only after a private employer chooses to test.

If a public employer is not otherwise required to test but chooses to test, the statute requires a written, duly promulgated policy that complies with the Louisiana Drug Testing Statute. Public employers may only conduct the following types of testing:

- Preemployment testing

- Post-accident testing

- Testing as part of a monitoring program established to assure compliance with a rehabilitation agreement

- Random testing of only safety-sensitive or security sensitive employees Public employers must conduct preemployment testing and random testing of employees "whose principal responsibilities of employment include operating a public vehicle, performing maintenance on a public vehicle, or supervising any public employee who operates or maintains a public vehicle."

All employers must follow specified testing procedures when conducting testing under the statute. A laboratory certified by the National Institute for Drug Testing (NIDA) or by the College of American Pathologists (CAP_FUDT) must be used for testing. Employers must give current employees initial drug screening tests and confirmatory tests reviewed by an MRO before taking employment action. The statute also mandates privacy to the individual during the collection process. An individual may be observed when giving a sample only in the situations listed under the law. The statute also requires that all information related to the testing process be kept in a confidential manner.

Payment for the Cost of Preemployment Inquiries: The general rule in Louisiana is that employers must pay for the cost of any pre-employment inquiries. However, there is a limited exception to this rule, which allows reimbursement for the cost of preemployment medical examinations and drug and alcohol tests under limited circumstances. The law governing this exception is below:

Louisiana Revised Statutes 23:897. Medical and other examinations, fingerprinting, requiring employee to pay for, prohibited; enforcement of provisions; civil and criminal penalties

A. Except as provided in Subsection K of this Section and in R.S. 23:634(B), it is unlawful for any public or private employer to require any employee or applicant for employment to pay or to in any manner pass on to the applicant or to withhold from an employee's pay the cost of fingerprinting, a medical examination, or a drug test, or the cost of furnishing any records available to the employer or required by the employer as a condition of employment.

B. Whoever violates this Section shall be fined not more than one hundred dollars or imprisoned for not more than ninety days, or both.

C. (1) Any person violating the provisions of this Section shall be subject, in addition to the criminal penalty provided in Subsection B of this Section, to a civil penalty of up to five hundred dollars. (2) Reasonable litigation expenses may be awarded to the prevailing party of the adjudicatory hearing. "Reasonable litigation expenses" means any expenses, not exceeding seven thousand five hundred dollars, reasonably incurred in prosecuting, opposing, or contesting an agency action, including but not limited to attorney fees, stenographer fees, investigative fees and expenses, witness fees and expenses, and administrative costs.

D. For the purpose of imposing civil penalties provided in Subsection C of this Section, each incident where an employee or applicant for employment was required to bear the cost of fingerprinting, a medical examination, or a drug test, or the cost of furnishing records available to the employer and required by the employer shall be considered to be a separate offense.

E. Civil penalties for violation of this Section may be imposed by the office of unemployment insurance administration only by a ruling of the executive director pursuant to an adjudicatory hearing held in accordance with the Administrative Procedure Act.

F. The executive director of the Louisiana Workforce Commission may institute civil proceedings in the Nineteenth Judicial District Court to enforce the commission's rulings.

The court shall award to the prevailing party reasonable attorney fees and judicial interest on such civil penalties from the date of judgment until paid and all court costs.

G. The executive director may institute civil proceedings in the Nineteenth Judicial District Court seeking injunctive relief to restrain and prevent violations of the provisions of this Section or of the rules and regulations adopted under the provisions of this Section. The court shall award reasonable attorney fees and court costs to the prevailing party.

H. In addition to the imposition and collection of civil penalties provided in Subsection C of this Section, the executive director is authorized to and shall collect from each employer for reimbursement to each employee or applicant for employment any amount of money charged to an employee or applicant for employment in violation of Subsection A of this Section.

I. The executive director is empowered to enforce the civil provisions of this Section and to adopt and promulgate such reasonable rules and regulations and to conduct such investigations as the executive director deems necessary to ensure enforcement of this Section.

J. Nothing in this Section shall be interpreted to prevent the collection of fees by a physician or other third party providing services to the employee or employer.

K. Notwithstanding any other provision of law, an employer shall have a right of reimbursement from an employee or an applicant who becomes an employee, provided the employee is compensated at a rate equivalent to not less than one dollar above the existing federal minimum wage and is not a part-time or seasonal employee as defined in R.S. 23:1021, for the costs of such employee's or applicant's preemployment medical examination or drug test if the employee terminates the employment relationship sooner than ninety working days after his first day of work or never reports to work, unless such termination is attributable to a substantial change made to the employment by the employer as applied in the Louisiana Employment Security Law.

L. Out of the civil penalties collected for violations of this Chapter, expenses incurred in enforcing the provisions of this Chapter may be paid by the commission.

M. An employer may withhold from the wages of an employee the costs of the preemployment medical examination, drug test, or both, provided that all of the provisions of R.S. 23:634(B) and Subsection K of this Section are met and further provided that the employee has signed a contract which fully explains the terms and conditions under which the employer's right of reimbursement is established and authorizing the employer to withhold the cost of such preemployment medical examination, drug test, or both, if the employee resigns within ninety working days.

Reference Checks in Louisiana: Information sought by checking references must not seek information that cannot be sought directly from the applicant. For example, avoid questions relating to prior discrimination suits, prior workers compensation claims, union activity, etc. It is appropriate to request that the applicant provide references and to then contact them to request information about an applicant. However, keep in mind that should the reference volunteer information that you cannot consider in your hiring decision, a failure to hire the person may lead to a claim that the hiring decision was based upon an unlawful factor.

Employers should consider getting a release and hold harmless from the applicant to give to reference sources. Louisiana’s Reference Check Statute, La. R.S. 23:291, provides limited immunity to employers who both give and procure employment related information as part of a reference check. Any employer that, upon request by a prospective employer or a current or former employee, provides accurate information about a current or former employee's job performance or reasons for separation, shall be immune from civil liability and other consequences of such disclosure, provided such employer is not acting in bad faith.


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