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Criminal History Checks and The Fair Credit Reporting Act

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January 08, 2014
Author: Carla Cox & Alicia Duleba
Organization: Jackson Walker L.L.P.


Many employers are required by law to perform criminal history checks prior to making permanent offers of employment to certain types of employees. Other employers conduct pre-offer criminal history checks on applicants for certain jobs. Recently, we were asked if criminal history checks performed by an employer on certain categories of employees were subject to the provisions of the Fair Credit Reporting Act (“FCRA”).

The answer, as is often the case with legal questions, depends on the facts. If an employer, in compliance with state law, requests a criminal history check from the Texas Department of Public Safety (“DPS”), the Federal Trade Commission does not consider the criminal history check subject to the requirements of the FCRA.1 The DPS is not a “consumer reporting agency” under the FCRA and the communication of criminal record data to the employer is not a “consumer report” even if the information is being used in connection with an employment decision.

On the other hand, if an employer retains a company to perform pre-employment screening services including criminal history checks, identification and Social Security number checks, education verifications, employment verifications, and reference checks, such activities do involve the provision of consumer reports since they touch upon an individual’s “character, general reputation, personal characteristics, or mode of living.” Further, the company providing the criminal history check is a “consumer reporting agency” (“CRA”) which is defined in the FCRA as any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties.”2

If an employer acquires a report for employment purposes, including a criminal history report from a CRA, the employer has certain duties under the FCRA. The employer is required to disclose to each affected employee (or applicant for employment) that the employer is obtaining a consumer report for employment purposes and to obtain the employee’s or applicant’s written permission before a report is obtained. In addition, before any adverse action (including refusal to hire) is taken based on the information in the report, Section 604(b)(3) of the FCRA requires the employer to provide to the consumer a copy of the report and the summary of the employee’s or applicant’s rights prescribed by the FTC. These rights include giving the applicant the opportunity to contact the employer and the consumer reporting agency to dispute or explain information in the report that the applicant believes is inaccurate or incomplete. Once an adverse action is actually taken, the employer must also comply with Section 615(a) of the FCRA and provide an adverse action notice to the applicant.

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Because the FCRA places additional burdens on employers, employers should be aware of these distinctions and, if an employer obtains information from a consumer reporting agency for employment purposes, the employer should comply with the requirements of the FCRA.

(Footnotes)

1 1998 FTC Opinion Letter, Goeke: http://www.ftc.gov/os/statutes/fcra/goeke.htm

2 1998 FTC Opinion Letter, Beaudette: http://www.ftc.gov/os/statutes/fcra/beaudett.htm


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