Background Checks: Minimizing Risks

How to Reject an Employment Application Without Being Sued

Background Checks Arizona

How to Reject an Employment Application Without Being Sued
This article will address whether an employer should conduct a background check and, if it chooses to do so, how to avoid potential liability. 

When to Run a Background Check 

Background checks allow the potential employer the ability to determine whether a job applicant has committed a crime or mishandled their finances. This information is valuable to protect the employerand others (i.e.: third parties). It protects the employer from harm caused by the employee directly upon the employer, for example, a future theft. It protects others from harm by the employee, for instance, a future car accident. When an employee harms a third party, the employer becomes susceptible to a claim of property damage and negligent hiring. 

Negligent hiring claims

Negligent hiring claims most often occur 1.) when the employee is in a position of trust, for example, handling other people’s money, 2.) when firearms are involved, for example, a security guard, 3.) when dealing with the public; or 4.) when the employee was driving a vehicle at the time of an accident. For roofing companieswho are considering hiring a particular employee who will be driving on the job, obtaining a report containing the applicant’s driving history is of the utmost importance. Doing so keeps the company vehicle safe and avoids liability from third parties. The easiest way to obtain driving records is to have the applicant sign a Consent To Release Motor Vehicle Record—One Time, form #96-0463, at the time he/she applies for the job. That form allows the employer to obtain the employee’s driving records from Arizona Department of Motor Vehicles. 

When hiring an employee who will operate a commercial vehicle, pursuant to rules set forth through the U.S. Department of Transportation, an applicant must be provided a detailed application with specific questions that are set out within the rules. 

A criminal background check should be conducted on any potential employee who will be handling money or driving a vehicle. Employers should disclose on its job application that it intends to run a background check on the potential employee. 

Running a Credit Report on an Applicant 

Employers can run a credit report on the potential employee. The rules surrounding the disclosure of the use of credit reports are governed by the Fair Credit Reporting Act. Before obtaining a standard credit report, the employer must have the applicant sign a document, separate from the application form, authorizing the employer to run one. If an employer requests a more detailed investigative report, that is, one that includes interviews with persons who have personal knowledge of the applicant’s lifestyle, reputation or personal characteristics, the employer must mail a written notice of the request to the applicant within three days of requesting the investigation. The notice must advise the applicant of the nature and scope of the investigation. If the applicant does request the information, the employer has five days to provide the applicant the name of the agency used for the investigation, questions asked of the witnesses, and types of witnesses. The employer is not required to identify the witnesses or the contents of their statements. 

If the credit reporting agency provides information within the public record, for example, lawsuits, criminal records, and driving records, the credit reporting agency must report to the applicant that that information was provided to the employer. Otherwise, the credit reporting agency has no obligation to advise the applicant what information the credit reporting agency disclosed. 

If the employer takes adverse action based upon what is in the credit report, the employer must provide oral, written or electronic notice of the adverse action. In addition, the employer must provide other information to the applicant. The notice requirements include contact information for the credit reporting agency, a notice that the credit reporting agency did not make any decision on hiring and that it cannot explain why the adverse action was taken, a notice of the applicant’s right to obtain a free copy of the report from the credit reporting agency and another notice of the right to dispute the information in the report. An employer faces exposure to actual damages, in some cases, punitive damages, attorney’s fees and costs, and even exposure to criminal liability for those who fail to comply with the Fair Credit Reporting Act. In spite of this exposure, credit reports should be run in the hiring situations described above. With a little care, including obtaining authority to run the reports when running a basic report, the employer can avoid potential liability. 

Refusing to Hire a Convict Can Lead to a Discrimination Charge

When hiring personnel, it makes sense to avoid applicants with criminal histories. An applicant with a criminal history may be more likely to act in ways that could cause trouble for your company. So it may be a surprise to find that companies cannot have policies that automatically exclude persons with criminal histories.

refusing to hire a convict discrimination criminal record

When hiring personnel, it makes sense to avoid applicants with criminal histories. An applicant with a criminal history may be more likely to act in ways that could cause trouble for your company. So it may be a surprise to find that companies cannot have policies that automatically exclude persons with criminal histories.

How could this be? The Department of Laborand the EEOC have opined that policies that exclude all individuals based on criminal records and that do not consider the nature and age of the offense may violate federal laws. According to the Department of Labor and the EEOC, this is because the policy may have an adverse impact on certain racial or ethnic groups.

The three-factor test to avoid a discrimination suit

If an employer’s policy of not hiring applicants who have been convicted of crimeshas a negative impact on a racial or ethnic group, the company may still avoid a claim of racial discrimination by the EEOC. To avoid such a claim, the employer should be able to show that the policy is related to the job and is a business necessity. It can do this by following guidelines published by the EEOC. However, these guidelines are all but impossible to comply with. Alternatively, the employer can analyze how the policy relates to the job and whether the policy is a business necessity by using a three factor test. The three factors are

  1. the nature and gravity of the offense;
  2. the amount of time that has passed from the offense or sentence; and
  3. the nature of the job the applicant is seeking.

The EEOC has produced a list of “best practices” to follow in avoiding liability for discrimination. They include

  1. making sure any policy requires independent assessment of the applicant;
  2. narrowing the policy to
    1. the essential job requirements and circumstances of the jobs themselves;
    2. the specific offense, or types of offenses, that may demonstrate they are unfit for the job; and
    3. an appropriate duration between the offense and when the applicant is being considered
  • not asking for a criminal history, or limiting the questions to convictions that would be job-related to the particular position consistent with business necessity; and
  • keeping the applican’ts criminal history confidential.

It seems unimaginable that the EEOC would charge a roofer in Arizona with discrimination based upon race or ethnic groups because the most of the roofing workforce is some type of ethnic minority and many have criminal records. However, government workers are unpredictable. You never know when a government enforcement worker will decide to try to make a name for him or herself by bringing a discrimination claim based upon a blanket policy of not hiring convicted applicants. A wise businessman should at least consider implementing a policy that addresses the three factors listed above.