When employers conduct improper background investigations and credit checks on job candidates, they’re breaking the law.
When you apply for a job or a promotion, you can anticipate that an employer will ask about your experience, qualifications, work history, education, driving record, or criminal record. The employer can inquire into your background and even require a background check, one of the most common of which is a credit report.
You should know, however, that no employer can initiate a background check without your permission, nor can an employer turn you down for a job or a promotion or demote or terminate you based on a negative report without giving you a copy as well as information for contacting the company that provided the report. Purposefully or negligently, some employers don’t comply with those rules, which is a violation of a federal employment law called the Fair Credit Reporting Act (FCRA).
What Obligations Does FCRA Impose on Employers?
One problem with background investigations and credit reports in particular is that they often contain errors. Concerned that job applicants were being turned down for employment due to inaccurate or incomplete background information, Congress amended FCRA in 1997.
Any employer that chooses to conduct a background check on a job candidate or employee must:
- Notify the candidate or employee of the intent to conduct the background check, ensuring that the candidate is fully aware of the use of consumer or other reports for employment purposes prior to agreeing to the investigation;
- Obtain signed consent to the background check from the candidate or employee in a manner that is “clear and conspicuous” and distinct from other portions of a job application;
- Notify the candidate or employee if a decision not to hire (or to fire) is predicated on the result of the background check; and
- Furnish the candidate or employee with name, address and phone number of the company that performed the check, and time to correct any mistakes contained in the report.
In What Ways Do Employers Violate FCRA Requirements?
Whether intentionally or inadvertently, companies engaging in employee background checks can run afoul of FCRA mandates by:
- Failing to provide “stand alone” disclosure and authorization documents;
- Impermissibly combining a release of liability with the requisite FCRA disclosure;
- Concealing or burying the FCRA disclosure language among routine application questions and other required legal notices;
- Failing to provide candidates or employees with mandated “pre-adverse action” and “adverse action” notices;
- Failing to include a copy of the background check report or a Summary of Rights with a pre-adverse notice to the candidate or employee
Regardless of intent, employers face substantial statutory damages, ranging from $100 to $1,000 for each instance of a FCRA violation, and possibly more if an individual lied to the candidate or employee to obtain the background report or used the report from improper purposes. Additionally, when groups of individuals encounter the same misconduct by a single employer, they may join together in a class action lawsuit to recover appropriate compensation.
Sommers Schwartz Has a Long and Successful History of Fighting for Employees’ Rights
For more than four decades, our attorneys have taken on employers large and small, securing favorable verdicts and settlements for workers seeking to earn an honest day’s pay. When the number of employees wronged by an employer warrants it, we initiate class action proceedings, a cost-efficient and often faster method for pursuing litigation. We know our way around the courtroom and aren’t afraid to take on big companies and the larger law firms they engage to defend them.
A job is important, not only to you, but also to your family and your combined future. When you need to pursue and protect your employment rights, you need Sommers Schwartz.