Man Fired for 49 Year Old Conviction: Who’s to Blame?

Nick Fishman

There are no two ways about it. Richard Eggers was terminated from his job of seven years as a mortgage company customer service representative after the company discovered on a random employment background check that he put a cardboard cutout of a dime into a wash machine in an effort to see if he would get free laundry service . . . in 1963. Since that time, he hasn’t had so much as a speeding ticket.

So before we get into who is to blame, let’s take a look at the mitigating factors here:

  • Misdemeanor conviction for a stupid prank
  • Crime was committed when he was in his 19 years old
  • Conviction is 49 years old
  • No criminal activity since the incident
  • No apparent threat to his employer

When you add these things up, this would seem to be a case that the EEOC would be chomping at the bit to pursue.

HOWEVER THE EMPLOYER IS NOT TO BLAME!!!

Sure, nobody thinks this is fair.  Heck, his employer, Wells Fargo probably doesn’t think it’s fair either.  However, they have no choice.  The Federal Deposit Insurance Corporation (FDIC) has strict rules and regulations when it comes to those with criminal records. Section 19 of the Federal Deposit Insurance Act prohibits any person who has been convicted of any criminal offense involving dishonesty or a breach of trust or money laundering, or has agreed to enter into a pretrial diversion or similar program in connection with a prosecution, from becoming or continuing as an institution-affiliated party, owning or controlling, … or otherwise participating in the conduct of the affairs of an insured institution without prior written consent of the FDIC.

And what are the potential penalties for hiring those with such records?  There can be substantial financial penalties for institutions who hire individuals in violation of Section 19. Does $1 million a day while the violation continues get your attention? Imprisonment for up to 5 years is also on the sanctions menu.

So now you know everything.  What would you do? Face $1 million fine per day and possible criminal charges (which would then make you persona-non-grata at an FDIC institution) or simply terminate the employee? This stinks all around.  The FDIC is trying to protect the financial institution, the bank is trying to avoid fines and imprisonment and the poor guy just wants a job.

Perhaps, it might be time to look for some more specific pre-employment screening guidelines.

Nick Fishman
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Nick Fishman

Nick Fishman is the co-founder of EmployeeScreenIQ, a leading, global employment background screening provider, and serves as the company’s executive vice president and chief marketing officer. He pioneered the creation of EmployeeScreen University, the #1 educational resource on employment background checks for human resources, security and risk management professionals. A recognized industry expert, Nick is a frequent author, presenter and contributor to the news media. Nick is also a licensed private investigator in the states of Ohio and Texas.
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  • Randy

    No one in their right mind should have fired this man.

  • Pingback: Bank Employee Sues Over Termination Due to Background Check | EmployeeScreenIQ Blog()

  • Name Sara

    Unfortunately, our “government” wrote a lot of crazy laws and the bank would have been subjected to huge penalties if it was discovered that the man was still employed – no questions asked or allowed. These same lawmakers don’t allow a deaf child to “sign” his name if his hands make it look like he’s got a gun.

  • there should be a more flexible guideline to avoid such unfair and unreasonable “sentence” . From this case, the outcome did no good for any part.

  • Name

    There are many exceptions to Section 19. For a long-term employee, I would expect any employer worth their weight to help their personnel through the process; which is very simple for minor offenses. Heck, I got my ‘no application required, just a letter’ back in 1 day….

    (5) De minimis Offenses. Approval is automatically granted and an application will not be required where the covered offense is considered de minimis, because it meets all of the following criteria:

    • There is only one conviction or program entry of record for a covered offense;

    • The offense was punishable by imprisonment for a term of one year or less and/or a fine of $1,000 or less, and the individual did not serve time in jail;

    • The conviction or program was entered at least five years prior to the date an application would otherwise be required; and

    • The offense did not involve an insured depository institution or insured credit union.

    A conviction or program entry of record based on the writing of a “bad” or insufficient funds check(s) shall be considered a de minimis offense under this provision even if it involved an insured depository institution or insured credit union if the following applies:

    • All other requirements of the de minimis offense provisions are met;

    • The aggregate total face value of the bad or insufficient funds check(s) cited in the conviction was $1000 or less; and

    • No insured depository institution or insured credit union was a payee on any of the bad or insufficient funds checks that were the basis of the conviction.

    Any person who meets the foregoing criteria shall be covered by a fidelity bond to the same extent as others in similar positions, and shall disclose the presence of the conviction or program entry to all insured institutions in the affairs of which he or she intends to participate.

    “Section 19 imposes a duty upon the insured institution to make a reasonable inquiry regarding an applicant’s history, which consists of taking steps appropriate under the circumstances, consistent with applicable law, to avoid hiring or permitting participation in its affairs by a person who has a conviction or program entry for a covered offense. ”

    “Some applications can be approved without an extensive review because the person will not be in a position to constitute any substantial risk to the safety and soundness of the insured institution. Persons who will occupy clerical, maintenance, service or purely administrative positions, generally fall into this category. “

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