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Employment Background Checks and Hiring

I almost can’t believe it myself, but it’s already December. And this point in the year means it’s almost time to close the books on 2014. As the year comes to an end, I’ve spent some time looking back at the legal trends in hiring and employment screening throughout 2014. Here is a list of the top five background screening and employment issues from 2014 that are worth reflecting on as we get ready to raise a glass to ring in the New Year.

1. An Uptick in Job Growth

Let’s start with the good news. Hiring is up. Job growth for 2014 is ending on a strong note, and the government’s November jobs report was good. And I mean really good. The US economy had the biggest gain last month since January 2012, adding 321,000 jobs. Unemployment clocked in fairly low, at 5.8 percent. It all adds up to a report card in the A range, when all that was expected was a C or maybe a C+. November set a new record as the 50th consecutive month of job gains. As business analyst Jill Schlesinger put it, “2014 has become the best year for job creation since 1999!” (Cue the Prince music, please.)” That’s welcome news for job seekers and businesses.


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Congressional Committee Report

On November 24, 2014, Senator Lamar Alexander (R-TN) and the U.S. Senate Committee on Health, Education, Labor and Pensions (H.E.L.P.) issued a scathing report, taking the Equal Employment Opportunities Commission (EEOC) to task for a laundry list of egregious tactics. The report’s title sums it up nicely: EEOC: An Agency on the Wrong Track? Litigation Failures, Misfocused Priorities, and Lack of Transparency Raise Concerns about Important Anti-Discrimination Agency

The Report

The Senate H.E.L.P. Committee Report doesn’t pull any punches. Inside are key findings of questionable practices and litigation failures by the EEOC. The report criticizes the agency’s sketchy litigation tactics, its practice of filing suit without a commission vote, questionable discovery requests, the lack of cooperation with defense counsel and a failure to conciliate. It points out that the EEOC has been ordered to pay sanctions and attorney’s fees ten times since 2011, and it has been “openly chastised” by the courts. The report also slams the EEOC for a lack of transparency, citing the dearth of reports from the General Counsel’s office, the practice of introducing guidance without public comment, and failure to respond to F.O.I.A. requests.

The report includes a chart listing the ten cases where the EEOC has been ordered to pay sanctions over the past four years. The list includes the Peoplemark case, which involved disparate impact claims based on the company’s background screening policies.

To sum it up, the report asserts that the EEOC’s tactics are ineffective, burdensome, and are costing taxpayers too much money.

A few of the specific complaints contained in the executive summary of the publication are as follows: [...]

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If there’s one part of the hiring process when the candidate experience can blow up, it’s the background check. The idea of a background check is daunting for most people—even those with a clean record. If a candidate is rejected as a result of something in the background check, it is increasingly common to hear from their legal representative. One way employers can avoid problems in the background screening process is to educate job applicants. As the old saying goes, an ounce of prevention is worth a pound of cure. [...]

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Uber Background Checks

Uber can’t seem to get it right. First, the company was criticized for NOT doing background checks, and now it’s under attack for doing them the wrong way. The national ride sharing service that everyone loves to hate is back in the headlines (although I’m not sure they ever left) facing a class action lawsuit for alleged violations of the Fair Credit Reporting Act (FCRA). The case, Mohamed v. Uber Technologies Inc et al.[1] asserts that Uber violated the FCRA by failing to provide Mohamed and other drivers with a copy of their background check (as required). This case is just one more instance in a parade of many questioning the company’s practices. [...]

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FCRA Sues LinkedIn

Have you ever used LinkedIn to check up on someone? An employee or a prospective new hire? Of course you have–who hasn’t? And while I’ve never actually given the “recommendations” on LinkedIn much weight, I’ve often wondered whether employers actually rely on them to make a hiring decision. Social media sites have given us a whole new window through which to view candidates—both professionally and personally. [...]

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FCRA Background Check Settlement

This is a great time of year for most retailers. The holidays are just ahead, and consumer confidence is high. That’s the good news. Here’s the bad news: the trend of retailers being hit with FCRA class action cases continues to grow. As a colleague of mine, Scott Paler said recently, you can’t drive down the street in suburban American without noting the businesses in your shopping plaza that have been hit: Home Depot, Aaron’s Furniture, Whole Foods, CVS, Panera, Nine West, A.M.C., and so on. [...]

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Holiday hiring_2

Thanksgiving is just a few weeks away, and that means Black Friday, shopping online, and holiday music overload as we get ready for the big gift-giving season. It’s hard to believe, but holiday hiring season is already well under way. If you hire holiday or other temporary workers, it’s important to hire ones that you can trust. [...]

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Memphis-based AutoZone Inc. (NYSE: AZO) is the latest company to be reluctantly inducted into the FCRA class action club. The company was hit with a suit for alleged violations of state and federal law in its background screening process. The case, Aceves et al. v. AutoZone Inc, filed on September 30, 2014 in the Central District of California, claims that the retailer violated the Fair Credit Reporting Act (FCRA), California’s Consumer Credit Reporting Agencies Act (CCRAA) and the Investigative Consumer Reporting Agency Act (ICRAA). [...]

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The U.S. Equal Employment Opportunity Commission (EEOC) issued a press release this week announcing it reached a settlement with a background screening company over the company’s pre-employment screening services. According to the press release, the company is a consumer reporting agency (CRA), that “screens applicants for hundreds of companies nationwide.”

The agreement requires the company to change its website, screening policies, and training procedures to ensure compliance with the Americans with Disabilities Act of 1990 (ADA), the Genetic Nondiscrimination Act of 2008 (GINA), and anti-retaliation laws. The underlying concern was that an investigation into an applicant’s medical history, history of personal injury, or workers compensation claims would be used by prospective employers to discriminate against the applicant.

If anyone wondered whether the EEOC would eventually extend its reach to CRAs, that question has been answered. The press release quotes Janet Elizondo, director of the EEOC’s Dallas District Office:

“It is important for the EEOC to engage, not only with employers directly, but also with their business partners who play an important role in facilitating connections between jobs and job seekers.”

Background screening companies take note, the EEOC is watching.

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Employment Background checks

It’s nice to share. At least that’s what we learned as kids. But for some people, sharing is more than just nice—it’s a way to make a buck. I’m talking about the sharing economy, which Forbes estimates at $3.5 billion this year, with growth exceeding 25%.  

For the uninitiated, in very simple terms, the sharing economy is a model where you loan out your stuff for a fee. It’s access over ownership. And the more we experiment with sharing as a business, the more participants are challenged by legal concerns, regulation, and operational details. Since one of the basic tenants of sharing is trust in the person and the product being shared, it’s time for some segments of the sharing economy to adopt a process that other business models have already embraced and acknowledged as a necessity—I’m talking about background checks. [...]

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