Background checks – Looking behind the curtain:

Background checks – Looking behind the curtain:


The recruiting process for hiring new hires is nearly complete. The applications were checked, the applicants were interviewed, and a conditional work offer was made to the seemingly perfect applicant. The only thing left is for the applicant to pass the background check successfully. This sounds easy, but if not done properly, looking behind the curtain can expose your company to liability.

Next, employers can only perform background checks on prospective employees after the prospective employee has made a conditional offer of employment and accepted it. A good practice is to have the conditional letter of work offer signed and approved by the prospective employee along with a written Background Check Authorization. This gives proof of the job offer, the approval of the applicant, and the background check authorization. No background checks should be performed before both the signed conditional work offer letter and the authorization form are returned after receipt, and the provisions of any collective bargaining agreements that might apply should be taken into account.

Second, with various groups of workers, performing the background check can be different. For example, for the hiring of an accountant managing payroll and financial accounts, the background check an employer performs will be different from that for a receptionist. It would be reasonable to perform a credit history review as a mandatory and valid condition of employment, provided that the accountant would manage money, bank accounts, and payroll. On the other hand, a receptionist’s pre-employment credit check is not warranted unless the employer can demonstrate that there is a necessary and acceptable justification for the credit check. In that case, to justify the pre-employment credit check, a general pre-employment background check policy would not be appropriate.

Third, new fields of study by employers have been generated by the emergence of social media and its applications. Some employers ask prospective workers to have access to personal social media pages in the most extreme cases, so the employer can review the social media messages to learn more about the prospective employee. Oregon has expressly enacted law banning an employer from asking or requiring a prospective employee or any employee to report or have access to a personal social media account (with the exception of a very narrow exemption that is not relevant here). Employers should be extremely careful to avoid asking for or requesting a potential employee to request social media user names and passwords. Violation constitutes an illegal practice of employment and gives the aggrieved prospective or existing employee a private cause of action. If an employer reviews “public” social media, the best practice will be to have someone who is not the recruiting decision-maker monitor the social media platform so that the decision-maker may not act on protected features that could be exposed.

Fourthly, the employer should have a clear idea of what information should be collected, how it should be obtained, who should have access to and use of the information, and what the Equal Credit Reporting Act (‘FCRA’) is responsible for. Unfortunately, employers can fail to use best practices to escape liability in the recruiting process when there has been a substantial passage of time between recruitment for open positions. Too frequently, they actually neglect the FCRA’s submission to the recruiting process and then deny a prospective employee without offering sufficient details and an opportunity to question and justify the negative information that occurs in a customer study. Since a credit bureau report is a customer report, for example, employers have particular duties to perform until they can rely on the report to make an employment decision. The best practice is to consult for assistance with employment legal counsel in understanding the duties in the recruiting process, particularly as it relates to background checks.

Finally, employers need not decrease or discontinue carrying out background checks on prospective workers. They can, however, carefully review the job description and then decide what sort of background check would provide the appropriate details to aid with the final decision to employ. If the information requested is not acceptable or applicable to the advertised role, a one-size-fits-all approach to background checks can lead to possible unlawful hiring practices. Similarly, if a proper background investigation is not performed, an employer will be held liable for foreseeable damages actually committed by an employee. However, if the background check is done in good faith, reasonably tailored to ensure that the information obtained is job-related and justified by the nature of the position being filled, then the information obtained and relied on, including information covered by FCRA, is suitable for the recruitment process and will not give rise to liability.

Employee recruitment and selection is an environment that, if not handled properly, particularly background checks, may create potential liability. If it has been some time since the employer has recruited, it would be wise to consult with employment legal counsel to assist in outlining a fully legal and defensible process. By consulting with an employment attorney, the employer may not only identify and hire the best candidate, but it will have avoided some of the mistakes that can create liability when looking behind the curtain.

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