Every year in the USA lawsuits involving action by the Equal Employment Opportunity Commission (EEOC) and based upon the Fair Credit Reporting Act (FCRA) come to trial. Regardless of the result of a court trial, litigation is a costly expenditure for a company.
The use of public records such as criminal background records in the hiring process or rental process are regulated by certain entities and specific rules apply to when and how they can be used. Additionally, employment screening utilizing employment background checks like criminal background checks are not just regulated by a number of agencies including the EEOC but also by State and Local laws; enforcement of these laws means these entities can sue companies that violate any applicable law.
Further, employment screening practices are regulated by a number of agencies and laws governing the use of public records including the proper use of criminal background records and can vary between jurisdictions. Well-qualified background screening agencies understand that the actual screening process can be very complicated and requires a number of steps that are regulated by law. That is why partnering with a reputable employment screening company can greatly assist in avoiding hiring-related litigation.
Proper and compliant background screening is a critical tool utilized by hiring managers to make a well-informed and legally compliant decision on a job applicant. The information drawn from a typical pre-employment background check can verify and confirm information provided by an applicant. From credit worthiness to criminal history data, a background check can be extremely valuable to an employer.
As has been seen in recent court cases the cost of hiring-related litigation can be very expensive; however if employment screening practices are legally complaint and background reports obtained are used according to Federal, State and Local mandates the whole ordeal of going to trial can be avoided. A best practice remains for an employer to work with a well-qualified third-party background screening agency to remain fully compliant with all existing laws governing employment screening.
In 2012 the EEOC released guidance to employers regarding how to lawfully manage the use of criminal history records as part of pre-employment background screening. This action created some concern for hiring managers.
A Texas court took up the matter and pushed back against the EEOC in a lawsuit, State of Texas v. EEOC, No. 5:13–CV-255, 2017 U.S. Dist. LEXIS 30558 (N.D. Tex. Feb. 1, 2018).
From Lexology.com (Feb 28, 18):
The Court granted the EEOC’s motion for summary judgment, and denied Texas’s motion for summary judgment and request for declaratory relief. First, the Court opined that Texas did not have a right to maintain and enforce its laws and policies that absolutely bar convicted felons (or certain categories of convicted felons) from serving in any job that the State and its Legislature deemed appropriate. lexology.com/library/detail.aspx?g=24076a67-0f45-44e8-ade3-976815d65eba
In three recent cases brought under the guise of FCRA enforcement employers prevailed. In Lewis v Southwest Airlines; Branch v Geico; and, Culberson v Walt Disney results varied but the ultimate outcome shows the employer victorious. jdsupra.com/legalnews/employers-prevail-in-fcra-class-actions-49345/
But at what financial cost?
Larger companies with legal departments can bear the brunt of a court case brought forth due to background screening concerns. But this prospect for small to mid-size companies could be financially devastating. Maintaining compliance with laws governing the use of employment background checks is a prudent best practice.
From JDSupra.com discussing conclusions from recent FCRA related lawsuits (as cited above) (Mar 1, 18):
The law in this area is dynamic, and employers should continue to monitor case law and regulatory developments. To mitigate risk, employers should also arrange for a privileged review of their disclosure documents and pre-adverse action notices and procedure. In addition, employers should continue to be mindful of their obligations under expanding state and local ban-the-box laws, which intersect with the FCRA’s required processes. jdsupra.com/legalnews/employers-prevail-in-fcra-class-actions-49345/
Ultimately a best practice remains for companies large and small to work with a well-qualified third-party background screening agency in order to remain fully compliant with all laws governing the use of reports related to background screening and the practice of background screening itself.
EEOC and FCRA lawsuits can be very expensive for any company and may be avoidable by partnering with a professional well-qualified background screening agency. Having a legally compliant hiring process can help thwart lawsuits and protect a company from financial risk.
Decisions related to hiring, firing, promoting or reassigning should be backed by compliant employment background checks that abide by current laws including, Federal, State and Local laws as well as remaining compliant with regulations enforced by the EEOC and based on the FCRA. Knowing the rules and regulations pertaining to the hiring process and partnering with a reputable and highly qualified employment background screening company that also knows the rules and regulations required by law is the safest route in mitigating risk. Then all it comes down to is the proper implementation of such polices and that can help any company or organization in the USA avoid costly litigation and at the same time give all job applicants a fair chance at gainful employment.
To read more about the EEOC and FCRA and how companies and organizations in the USA can avoid costly litigation due to improper and non-compliant hiring policies and procedures read recent CriminalBackgroundRecords.com press release: EEOC and FCRA Lawsuits Can Be Costly & Might Be Avoidable