Adjudication Modules Sabotage Your Hiring Process

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Verifier readers know that we strive to shed light on the “latest and greatest” products offered in the pre-employment screening field. None of these emerging products is more worthy of our attention than the Adjudication Module, more commonly referred to as a Pass/Fail/Review, Hire/Don’t Hire or Red/Yellow/Green system.

What is an Adjudication Module?

Generally speaking, adjudication modules are matrices, grids or charts that dictate specific reactions to convictions for identified crimes. They provide users with what is perceived to be a simple guide for making a complicated decision. Some can be as basic as directing the hiring manager not to hire any applicant with a felony conviction while others are sophisticated models that attempt to identify the entire spectrum of crimes and stage certain if/then scenarios such as whether the applicant has been convicted of multiple crimes or convicted within a certain time frame to determine if the individual is eligible for employment.

Perceived Benefits Quickly Become a Liability

What seems like a great way to develop consistency in your hiring practices and eliminate the ability of a hiring manager to make the “wrong” decision quickly becomes a slippery slope. One challenge to developing an effective adjudication module is that different jurisdictions define crimes differently. Thus, different states (or counties for that matter) may refer to similar crimes by different names or may ascribe different elements to similarly named crimes. For instance, in the state of Texas it is considered check fraud if you have ever knowingly or unknowingly bounced a check for more than $5.00. The general reaction of an employer is to consider such a conviction as serious conviction. A matrix cannot tell the difference between fraud in the state of Texas as opposed to fraud in the state of California. As a result, the employment decision is placed at the mercy of a chart as opposed to a human being capable of making the appropriate distinctions. Under these conditions, a comprehensive and detailed matrix is virtually unachievable, and often does not result in the decision you would have made had you considered all of the relevant information.

In addition to the aforementioned obstacles, the application of adjudication modules can be extremely challenging and ultimately run afoul of a myriad federal and, or local laws and regulations. For example, numerous states restrict the number and kind of criminal offenses that can be considered in making employment decisions. Adjudication modules must anticipate these restrictions, or expose the employer to significant liability exposure.

If these unintended consequences cause concern, so too does the provision set forth by federal and state agencies with oversight of employment processes who require a more detailed and subjective deliberation than allowed by adjudication modules. The Equal Opportunity Commission has deigned that each and every employment application inquiring about criminal history should include the following disclaimer (or its like):

A criminal conviction will not necessarily be a bar to employment; rather, such information is only relevant in determining whether the conviction is directly related to the job for which you are applying. Factors, such as age and time of the offense, seriousness and nature of the violation, and rehabilitation will be taken into account.

Many states have similarly legislated (or have included in regulations or guidance) that the elements of a crime for which an individual was convicted must be “substantially related” or “directly related” to the job duties of the position sought. Applying a matrix subject to the deficiencies described above is inconsistent with this goal because matrices do not allow for extenuating circumstances, deviations or mistakes that often occur when evaluating the employability of applicants or employees. Moreover, matrices by definition preclude the detailed case by case analysis often required to overcome the disparate impact on minority groups that inevitably results from criminal background screening. Thus, the employment of an adjudication module created to apply consistency and objectivity actually may result in inconsistency in the hiring process and most likely will violate federal and local laws and regulations.

Other Practical Considerations

Now that we’ve discussed the pitfalls involved in the implementation and execution of an adjudication module, let’s address a recent trend among employment screening providers to implement related services. By allowing a screening provider to interpret an adjudication module, companies are effectively ceding control of their hiring decisions to a third party. This is both ill-advised and has potential legal implications. Employers should be aware that they will not escape liability by ceding the hiring decision to a third party by virtue of a matrix. An employer utilizing a matrix should seek indemnification from the third party administrator. Unfortunately, the administrator also will seek indemnification from the employer for any liability stemming from the application of the matrix, and will resist extending indemnification to the employer. This adds a level of complexity that many employers would rather avoid but only will do so at their peril.

What can an employer do?

We are often asked by our clients, what elements of a background check deserve the most attention. The answer is, review everything. Every organization is unique in their hiring needs and practices. As a hiring manager, you know what is important to your organization and cannot entrust the decision-making responsibility to anyone outside of it. Formulate an opinion of the candidate based on the application, resume, interviews, test results, and the candidate’s assertions of skills, experience, aptitudes, character traits, and moral compass. Once you’ve decided this person is the prime candidate to fill the position, use a background check to ensure these criteria withstand impartial scrutiny. Every individual that you consider for employment should be judged on their own merit, strengths and weaknesses, by someone in the hiring organization that can consider the complete individual as the sum of each piece of information available.

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