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    FCRA Sues LinkedIn

    LinkedIn is off the hook. A California district court has dismissed a class action lawsuit filed against the business networking site. The full decision can be found here. The popular social network was sued last year by job seekers who claimed that LinkedIn’s Reference Searches cost them jobs. The theory of the case was that LinkedIn should be treated like other background screening companies–a theory that was successful against another website, Spokeo.

    Case Background

    Tracee Sweet, the named Plaintiff, had what she thought was a positive interview with a prospective employer. In fact, she later got word that she would be hired. Soon thereafter, the company called her back and said it had changed its mind. As it turns out, the company had checked some references using LinkedIn’s “References Searches” function. Reference Searches is pretty much what it sounds like—it’s a LinkedIn feature that employers use to track down people with whom an applicant may have worked previously.

    Sweet and other similarly situated job seekers filed suit, alleging that the reference feature violated their rights under the Fair Credit Reporting Act. At the crux of the complaint was the plaintiffs’ argument that LinkedIn was acting as a consumer reporting agency (CRA) under the Fair Credit Reporting Act (FCRA), and that Reference Searches were consumer reports. Last week a California U.S. District Court dismissed the case, finding that the Plaintiffs had not alleged sufficient facts to support a plausible FCRA claim.

    The Decision

    In reaching its findings, the court emphasized the following points:

    First, the court found that LinkedIn’s publications of employment histories of the consumers who are the subjects of the Reference Searches are not consumer reports:

    “because the information contained in these histories came solely from LinkedIn’s transactions or experiences with these same consumers. The FCPA excludes from the definition of consumer report any “report containing information solely as to transactions or experiences between the consumer and the person making the report.”

    Second, the court found that LinkedIn’s publications Reference Searches still would not be consumer reports because Plaintiffs’ allegations do not raise a plausible inference that LinkedIn acts as a consumer reporting agency when it publishes these histories:

    The court distinguished the Plaintiffs from the plaintiffs in Robins v. Spokeo, Inc., noting that in Robins, the court held that the plaintiff’s allegations that the defendant “regularly accepts money in exchange for reports that contain data and evaluations regarding consumers’ economic wealth and creditworthiness [were] sufficient to support a plausible inference that [d]efendant’s conduct falls within the scope of the FCRA.”

    In this case, the court found that LinkedIn was merely carrying out consumers’ information-sharing objectives and not acting as a consumer reporting agency with regard to its assembly of this information.

    Third, the court found that the Plaintiffs’ allegations are insufficient to state a claim that the information in the Reference Search bears on the “character, general reputation, mode of living” and other relevant characteristics of the consumers as required by the FCRA.

    Fourth, the court found that Plaintiffs do not state a claim that the Reference Search results are used or intended to be used to determine eligibility for employment. “A communication must be “used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for . . . employment purposes . . . .” in order to be a consumer report.” The court did not find that the search results themselves were used in the hiring decision. Rather, the results were used to locate people who may or may not then provide information about the candidate.

    Bottom Line

    The good news is that employers and recruiters can continue to use LinkedIn as they always have, without fear of additional compliance requirements that would have attached if the court had found that the web site was in fact a CRA. Likewise, LinkedIn can carry on business as usual. Since it is not a CRA, it has no duty to verify the accuracy of the information reported in the Reference Searches, nor does it have a duty to put consumers on notice about the use of the information in the hiring process. The results of the case have an upside for users and consumers alike who rely on the power and convenience of LinkedIn every day (including me!).  The downside, if there is one, is buyer beware. Like any other social media source, much of what you find on LinkedIn is user generated content. There’s no good way to know if it’s accurate. My advice–make sure you do your homework and conduct a real background check before hiring someone you find on social media.




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        New York City

        Earlier this week, the New York City Council passed a bill that makes it unlawful for employers to request or use an job applicant’s credit history for employment purposes as part of their background screening practices. Intro Bill 261-A amends the City’s Human Rights Law to make it an unlawful discriminatory practice for an employer to use an individual’s consumer credit history in making employment decisions. The bill is expected to be signed by Mayor Bill DeBlasio and will be effective 120 days following approval.

        The city council created a limited set of exemptions for sensitive positions (see below), however it’s worth noting that these exemptions are much more narrow than those provided in similar state laws.

        Bill Exemptions:

        • an employer, or agent thereof, that is required by state or federal law or regulations or by a self-regulatory organization as defined in section 3(a)(26) of the securities exchange act of 1934, as amended to use an individual’s consumer credit history for employment purposes
        • persons applying for positions as or employed:
          • (A) as police officers or peace officers, as those terms are defined in subdivisions thirty-three and thirty-four of section 1.20 of the criminal procedure law, respectively, or in a position with a law enforcement or investigative function at the department of investigation;
            (B) in a position that is subject to background investigation by the department of investigation, provided, however, that the appointing agency may not use consumer credit
          • (C) in a position in which an employee is required to be bonded under City, state or federal law;
            (D) in a position in which an employee is required to possess security clearance under federal law or the law of any state;
            (E) in a non-clerical position having regular access to trade secrets, intelligence information or national security information;
            (F) in a position: (i) having signatory authority over third party funds or assets valued at $10,000 or more; or (ii) that involves a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer.
            (G) in a position with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the employer’s or client’s networks or databases.

        New City City joins ten states which currently prohibit the use of employment credit reports except in limited circumstances: California, Colorado, Connecticut, Illinois, Hawaii, Maryland, Nevada, Oregon, Vermont and Washington.

        Employers in New York City that conduct employment credit reports are encouraged to review their policies and practices to determine if they qualify for the aforementioned exemptions.

        Download our guide to help determine if credit reports are right for you.

         

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            Background Screening Compliance

            Every year, our Annual Background Screening Trends Survey unveils new insights into the minds of HR professionals and their experience with criminal background checks, resume lies, background screening compliance, social media background checks, and more.

            If you want to know how your peers and even competitors are handling their employment screening process, their greatest screening challenges, and how they stay compliant with “ban the box” legislation—or even what they’re failing to do, our webinar will reveal the answers to these questions and more. So, why is background screening compliance the new 800-pound gorilla? [...]

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                Background Checks

                Paramount Gets FCRA Claim Thrown Out

                Finally, a voice of reason. Employers got some good news from a judge in the Northern District of California last week, when the court granted Paramount Picture’s motion to dismiss a class action claim for alleged Fair Credit Reporting Act (FCRA) violations. The case was one of the many class actions that have been flooding the federal courts, disputing the validity of the disclosure form used for running a background check. This wave of litigation has erupted over the past twelve months, putting employers on the defensive against FCRA claims seeking millions in statutory and punitive damages.  The judge’s decision to dismiss the case against Paramount is a welcome development, and may be a turning point for employers facing FCRA class actions of this type.    [...]

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                  Do You Know EmployeeScreenIQ?

                  Published on 30 March 2015 by in News/Media

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                    EmployeeScreenIQ employees recently completed a survey focused on their pop culture preferences. It deserved an infographic. We think it’s a fun, unique way to highlight a slice of our culture.

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                    Interested in joining our team, find out what it’s like working at EmployeeScreenIQ here.

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                        I’ve been knee-deep in the online employment space for almost 20 years. But when EmployeeScreenIQ offered me a full time job last year, among other things, I thought it would be a great opportunity to stay in the industry while viewing the world through a very different perspective.

                        One example: Not every job opening needs a Help Wanted sign on the Internet but every hire needs a background check – even if every employer doesn’t do one on every candidate.

                        Screen Shot 2015-03-25 at 2.12.43 PMNeedless to say, I’ve learned a lot about screening job candidates and the companies who do so in the past year. There’s much that goes into what makes this engine purr.

                        Here’s a breakdown of what opened my eyes the most:

                        • Background checks are pretty much a commodity. Everything in a background check is publicly accessible. An arrest record in Any County, USA can be seen by anyone who knows what they’re looking for. Differentiation in this industry is achieved by having talent on the ground checking said information that’s better than the competition. That means constant attention to detail and efficiencies. It also means customer service truly makes a difference. User experience from the technology side is important too.
                        • Companies are scared to death. No one wants to recruit an employee who ends up being a bad seed and does something criminal. Not only is doing so a litigious nightmare, but it’s also a social media disaster waiting to happen.
                        • Candidates are scared to death. Lying on resumes and stretching the truth is out of control. Desperation leads to deception. Diploma mills are big business as a result, awarding PhDs and MBAs to anyone with a few hundred dollars to spend. Our own President and COO has a wall full of bought diplomas, showing just how easy it is to be something you’re not.
                        • Government keeps everyone guessing (and pulling out handfuls of hair). When the GOP won control of congress last year, it increased speculation that EEOC regulations might be eased and litigation defused. Additionally, the wave of marijuana legalization means employers have to stay alert to what’s going on with all levels of government.
                        • Background checks aren’t going away. You can argue that job postings might one day be unnecessary, thanks to sourcing or social media or robots or something, but as long as people behave badly – and they always will – then there will be a need to screen them before hiring them.

                        There are others, and nuances happen almost weekly. But this is a good overview of what I’ve discovered the past year. Never a dull moment, and the roller coaster is always more fun than the merry-go-round.

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                            Missing Data

                            The Government Accountability Office (GAO) has been busy. At the request of Congress, it’s been looking into criminal background checks. Last week the GAO released a report of findings from a two year study titled “CRIMINAL HISTORY RECORDS: Additional Actions Could Enhance the Completeness of Records Used for Employment-Related Background Checks.” The report lives up to that lengthy title–it is the most comprehensive accounting of the current state of FBI background checks, criminal record databases, and practices since 2006. It reveals when and why states conduct FBI record checks, and looks at whether states have improved upon reporting complete records into the FBI database. It also looks at the practices of private companies that conduct criminal record checks. [...]

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                                Casino employee theft

                                Is your business being sabotaged by its own employees?

                                For many employers in the gaming industry, the answer to this question may be a surprising one. Research shows that almost half of all losses in casinos is due to employee theft. In casinos, theft can happen in many different places, from the cashier cage to the vault rooms to the casino floor.

                                Material theft isn’t the only kind of theft that employees can commit. Time theft, when employees are supposed to be working but are loitering or doing personal things without anyone knowing, is another serious problem in the workplace. In the United States, it is estimated that employee time theft costs employers almost six full weeks of an average employee’s salary every year.

                                Completely preventing theft is nearly impossible. Even an employer who takes every precaution may still get burned by theft, especially in the field of gaming where money flows so openly throughout the business. Fortunately for casino owners and operators, there are background screening best practices that can help minimize the chance of employee theft. [...]

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                                    Ban the box compliance

                                    It’s no secret that ban the box legislation is on the rise in cities, counties, and states across the United States. Just in case you haven’t heard much about this movement yet, here’s a brief explanation. When a particular location “bans the box” this means that employers are unable to include the check box on applications which asks whether or not an applicant has been convicted of a crime—at least not until later in the hiring process.

                                    While these laws are well-intentioned, they’ve often become confusing for employers. While they protect job candidates from discrimination, laws are inconsistent, which exposes employers to an increased risk of breaking the law if they are unaware of the facts. [...]

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                                        Credit Report Reforms

                                        Later today, the big three credit bureaus, Experian, Equifax and TransUnion are expected to announce major new reforms on how they will report adverse information on a consumer’s credit report and the steps they will take when a consumer wishes to dispute the information.

                                        What’s The Difference

                                        According to the Wall Street Journal, the credit bureaus have agreed to wait 180 days before adding any medical debt information. During this time, consumers will have the opportunity to clear up the debt. When an insurance company pays off medical debt, they will quickly be removed from report (as opposed to other negative information which can stay on a report for up to seven years). [...]

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                                          All information contained on this website is provided by employeescreenIQ solely for the convenience of the site viewers. employeescreenIQ is not providing legal advice or counsel and nothing provided on this website or otherwise by employeescreenIQ should be deemed as legal guidance or advice. Users are solely responsible for complying with all local, state, and federal laws relating to the use of any information provided on this website and any information products provided by employeescreenIQ. Users should consult with their own legal counsel if they have questions regarding their legal responsibilities or any information provided by employeescreenIQ.