Who, What, Why . . .

Who does it apply to: Any employer interested in protecting their business from the potential consequences of not doing background checks and some employers who are otherwise required to perform checks.

What kind of checks are there: At first, you might just think of the basic criminal background check and verifying references, but there are many types of checks to consider:

Litigation\Bankruptcy: Does the person have a propensity to sue, and if so, for what, discrimination? Should the person be handling your money if they have filed bankruptcy before?

Education Verification: How many stories are there about people who do not have the degree they claim? Universities regularly get requests of this type. For their own protection, the schools often require written consent.

Military History: What kind of a soldier were they? What were the circumstances of their discharge?

Drivers License: Is this person going to drive one of your vehicles? Might they ever drive for work purposes in their own car? What if they have a bad history and get into a wreck? How will that be used against your business in court?

Drug Tests: Do you want to put a worker out there who takes cocaine on the weekends?

Licensing Boards: If the employee is licensed, like an attorney, have there been any complaints? How were they resolved? Boards that are government affiliated usually will provide information without a written consent, but it is worthwhile to have one ready.

“Googling”: I guess it is a verb now. What does the person’s internet persona look like? Are they the author of a blog that your clients might not appreciate?

Social Media Reviews: What have they posted on Facebook? Twitter? What kinds of pictures do they post on Flickr?

Credit Check: Can your employee handle their finances? If not, what does that say about their ability to manage your money? What distractions might money trouble bring?

Will I need consent: Under the Fair Credit Reporting Act, consent is required for criminal and credit background checks. The military will not provide service records without consent. Universities vary. Some will provide a date of graduation and degree earned without consent, but transcripts are almost never provided without written consent. Always obtain a written consent for drug testing regardless of whether it is required because it is an invasion of privacy.

What can I do to get better responses on references: I advise employers not to give references. There is no upside and the downside may be getting sued by a former employee. So, what can you do to pull some extra information out of a tight-lipped employer? Obtain a release from the applicant for the benefit of his or her former employers. You can also pass along a copy of Texas Civil Practice and Remedies Code Chapter 103, which provides immunity to employers who provide references as long as they don’t say anything maliciously false.

Are there problems with internet searches: Finding what is said about a prospect can be helpful, but it is fraught with peril. While searching, you may find your applicant listed as a deacon for their church. Without intending to do so, you just asked the question about your applicant’s religion. There are companies that do a better job than just “googling” to gather an applicant’s internet persona and they sanitize the results of any protected class information to avoid you learning things you would rather not.

How can I access an applicant’s social media sites: Some people post their entire lives on Facebook or tweet everything that goes on. This creates a huge body of semi-public information about the person you might prefer your clients not see. For this reason, many employers are asking applicants to provide passwords so they can review what the employee has posted. To combat this, Facebook has instituted a rule that members cannot give out their password. While the rule is of no consequence to you, it does not send the right message to ask a prospective employee to violate their agreement with Facebook.

There is a way, however, for an applicant to print out everything they have posted in the last few years so you can examine it. The problem with this approach is the same as “googling,” but avoids the fuss over passwords.

Are there special rules for certain checks: Yes. If credit or criminal history is used to make a hiring decision, the employer must provide a copy of the report along with a written note to the applicant explaining the effect. Also, there are requirements to correct erroneous addresses with the reporting credit companies. If you receive a letter from the credit reporting company regarding an incorrect address, you must confirm the address (check with your lawyer – the rules are specific on how) and report back to the credit agency.

What are the limitations on criminal background checks: In Texas, background companies are not permitted to provide criminal histories going back further than seven years unless the annual salary is expected to be over $75,000.00. Many out-of-state companies ignore this rule. Doing so is a violation of Texas law for them, but not the employer. That said, I encourage employers not to use information over seven years to avoid the possibility of a claim they conspired with the background company. Also, be sure to review our prior EH edition on discriminatory use of criminal checks.

Common Situations

It won’t happen to me: Data Entry, Inc. hires Mary to – wait for it – enter data. The company conducted a thorough background check of Mary’s criminal and credit histories and contacted all of her former employers. One Friday afternoon, the server goes down and someone from Data Entry has to run over to the IT company to pick up a part. Data Entry sends Mary and instructs her to hurry because there is a deadline looming on a project. Mary jumps in her car and promptly runs a red light trying to get there quickly. In the process, she runs down 10-year old Johnnie, turning him into a quadriplegic. During the deposition of Data Entry’s president, the lawyer for young Johnnie hands over a copy of Mary’s horrific driving record and asks the president to explain why they let Mary run the errand. Simply put, the cost of a driving record check would have been much less than the $25 million a jury will award Johnnie.

No addicts on my payroll: Devin at Weed Removers, Inc. isn’t going to have any druggies on his payroll. He tests all of his applicants for all possible illegal drugs. Rod applies for a job and signs a consent to be tested. The test comes back positive for prescription pain medicine. Devin rejects Rod and says he ought to get some help. Instead of going for help, Rod runs down to the nearest EEOC office to file a claim under the Americans with Disabilities Act. Has Devin done wrong? Unfortunately, yes. As it happens, Rod has a back injury and Devin’s failure to meet the requirements for a post-offer of employment health screening has just violated the ADA.

It’s the Delivery Man: Rick’s Remodeling regularly sends crews into residential homes to handle projects. One of Rick’s employees becomes upset with a customer and starts a fist fight. The customer is injured and sues for damages. Is Rick liable? Maybe not. Texas law provides a certain level of immunity for business owners who run background checks on employees who perform in-home services or residential delivery and set-up services. There are many different types of businesses where background checks are required or beneficial: banking, nursing, nursing homes, and childcare facilities just to name a few. Be sure you are compliant with the law for your type of business.

What should I do

Good: Make at least the kind of background checks that protect you from liability to others: driving record, basic educational confirmation, criminal history, and possibly a drug test. Get written consent for the tests or you may become liable to the applicant.

Better: All of the above, plus the additional checks listed with the exception of “googling.” Always get a consent for all types of tests.

Best: Good and Better, plus, invest in a background check that covers all the bases and sanitizes results for information about protected classes.

Who, What, Why . . . 

Who does it apply to:  All employers that use criminal backgroundchecks to evaluate applicants or employees.

What is the issue:  Blacks and Hispanics are statistically more likely to be arrested and convicted of crimes than whites.  As a consequence, employers who make a blanket rule that any person with an arrest or conviction should not be hired or promoted may be unintentionally discriminating.  The EEOC recently used these statistics to force a settlement with Pepsi® over its policy against hiring anyone who has been arrested.   Following the settlement, the EEOC issued new guidelines regarding the use of criminal background checks.

Are the EEOC’s guidelines law:  The guidelines do not change existing law, but they reflect the EEOC’s focus on this issue and its intent to use the statistics against businesses.

How is the discrimination happening:  You all know discrimination is illegal.  You are probably less clear on the legal framework underlying discrimination, which comes in two forms: “disparate treatment” and “disparate impact”.  Disparate treatment involves intentionally treating one employee or a group of employees differently because of a protected characteristic.   Disparate impact is a little more subtle.  It involves a rule or policy established by an employer that disproportionately affects people in a protected group – here Hispanics and Blacks.  The EEOC’s new guidelines are primarily directed toward disparate impact discrimination where employers use criminal background checks as a threshold test to weed out applicants without considering the facts of each individual case.  Even though the employer’s policy is not discriminatory on its face, it can have the unintended consequence of reducing the number of Blacks and Hispanics in the employer’s workforce.

What are employers supposed to do differently:  To avoid accidentally denying a disproportionate number of Blacks or Hispanics a job or promotion, employers who use criminal background checks are required to make an in-depth analysis of that background.  Employers cannot simply deny all people employment because they have been arrested or convicted of a crime.  Instead, an employer must determine whether the specific criminal history should be used as a consideration for the job or promotion at issue.   Stated simply, employers should consider whether the particular crime should really act as a reason to deny a person employment to the particular job or promotion at issue.  As an example, a person considered for a night watchman position where people are rarely encountered should not necessarily be denied a job because of a conviction for assault in high school.   The EEOC wants to foster the use of targeted exclusions for particular positions.  This means that employers should evaluate each job category and exclude applicants with a criminal history only if that history relates to the performance of the job in question.

Are arrests somehow distinguishable from convictions:  In the EEOC’s view, employers should not ever use an arrest alone as a basis to deny a job or promotion to a candidate.  The EEOC cites two primary reasons for this view: (1) arrested people are still innocent until proven guilty; and (2) criminal databases are sometimes incomplete, leaving final dispositions out of records which might reflect an acquittal or failure to prosecute.  Interestingly, the EEOC does believe that employers can evaluate the underlying facts and act as judge and jury to decide whether the person committed the crime and whether there are extenuating circumstances that negate the arrest.

What type of in-depth analysis is required:  The EEOC cites to court of appeals cases setting out a three pronged analysis:

   • What was the nature and gravity of the offense;

   • How much time has passed since the offense; and

   • The nature of the position sought.

Are there some businesses that have to exclude convicts:  There are a large number of federal and state laws that restrict businesses from hiring people with certain criminal records.  For example, there are federal laws restricting people with criminal histories from having federal law enforcement positions, and being child care workers for federal agencies, bank employees, and port workers.  For a complete understanding of the restrictions that may affect your business, consult a lawyer.

Common Situations:

But we’re diverse:  Bakery of the South has a policy against hiring anyone with a criminal conviction in the last 10 years.   An applicant complains under the new EEOC guidelines.  After learning of the EEOC’s new guidelines and that its rule might not be legal, Bakery’s lawyer argues that there is no disparate impact against Blacks or Hispanics at Bakery because 40% of its employees are Hispanic and 35% are Black.  Are Bakery’s excellent diversity statistics sufficient to overcome the claim.  Unfortunately, no.  While it might seem counter-intuitive, simply having a diverse workforce does not change the fact that Bakery’s hiring practices have a disparate impact.  Without the policy Bakery might be 50% Black and 50% Hispanic.  But the law says I can:  If the federal limitations for working in banks are convictions within the last 10 years, Bankorama figures limiting for 20 years would be even better.  It can pride itself on the security it takes for its customers.  Is this OK?  There is no clear answer, but you can bet the EEOC is going to take the position that 10 years is good enough for the federal regulations, so it ought to be good enough for you.  If there are limitations in your industry, you probably should not go beyond them.

Only for applicants:  Nick has been a faithful employee of Fidget Widget, Inc. for 15 years, when the company’s owners sell out to Conglomerate.  Conglomerate wants to promote Nick to head Fidget Widget in the absence of the old owners, but finds a criminal conviction for felony assault 25 years ago when running a background check before the promotion.  Conglomerate refuses Nick the promotion because of this single criminal event.  Is Conglomerate within its rights?  No.  The guidance by the EEOC doesn’t just apply to applicants – it applies to all employment decisions.  As long as there is not a business justification consistent with Nick’s position, Conglomerate will be in the wrong with the EEOC.

What should I do:

Good: Be certain you are following all federal and state requirements applicable to your business restricting the hiring of convicted individuals.  Avoid using criminal convictions or arrests to make hiring decisions without a good connection to the position and your business.

Better: If using arrest as a basis to make hiring decisions, obtain the underlying facts and make your own decision about whether the applicant committed the offense.  Create conviction history restrictions for each job position in your business with strong consideration of whether the restrictions set are consistent with business necessity for that job.

Best:  All of the above, plus, document all facts considered for arrests and individualized circumstances considered when using convictions.  Be sure to draw the connection between the job and the need of the business in doing so.  Be careful not to create restrictions that are tenuous which might be questioned by the EEOC.