Are background checks now becoming a ticking time bomb for employers with increasing criteria and red tape. An individual or potential employee may or may not have skeletons and/or financial issues, criminal charges and so on. However the certainty remains that background checks should be fair and appropriate to all and follow legislation and current practice guidelines.
Background checks, in recent years, have become a minefield for many employers irrespective that they were following correct procedure. Recent class actions that have been recently resolved involved Domino’s Pizza, Kmart and Home Depot. Other companies currently facing action are Hertz and Dollar Tree Stores Inc. A current ongoing case filed earlier this year against Chuck E. Cheese’s (CEC) has claimed the background check authority was part of the multi page application. This is in violation determining this should be as per a stand alone document. The lawsuit also goes on to detail an understanding of employment provisions, absolving CEC of any liability, ongoing consent to background checks and or alcohol/drug testing.
Employers in California appear to be bearing the brunt and seem to be vulnerable on a number of fronts. Not only has the Fair Credit Reporting Act (FCRA) been cited in legal claims but also the Investigative Consumer Reporting Agencies Act and California’s Consumer Credit Reporting Agencies Act.
In April another class action saw the light of day against Extended Stay America Hotels. The terminology used within the application took on a similar tone to CEC and the action claimed the application was unlawful for a number of reasons. The application did not request written authorization, wasn’t a stand alone disclosure, included a release of liability and did not make the applicant aware a consumer report would be obtained. The legal action seeks to include around 684 hotels and all applicants within the past 5 years.
Regardless of the merits of a case costs to defend can be financially prohibitive. Employers need to comply with federal and state law. A stand alone disclosure needs to be adhered to for all background checks, along with related and relevant requirements. The most painless and effective route is to simply use a correctly worded stand alone disclosure.
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