An issue arising more frequently recently concerns the use of background check results in making decisions regarding hiring and termination of employees. Some commentators believe the frequency with which the issue has arisen is a result of more regular use of background checks, the greater relative ease in checking individuals' employment, credit and criminal history, and an awareness among employees of remedies which may be available against employers who improperly obtain and/or use background check results.
The federal Fair Credit Reporting Act governs the process by which employers may obtain background information on prospective and current employees. The FCRA requires that employees authorize in writing the employer or prospective employer to obtain background information via third parties, and limits the type of information which can be obtained. Some states also regulate the type of information which can be obtained. For example, Illinois recently enacted the Employee Credit Privacy Act which prohibits employers from inquiring about or using the credit history of an employee or prospective employee as a consideration for employment (California governor Arnold Schwarzenegger vetoed such a bill in California just last week, see Employment Screening Information for Employers).
Criminal background check results are also subject to litigation when used by employers. First the EEOC has long held that use of arrest records can have a disparate impact on minority applicants or employees. In addition the EEOC has held that use of convictions may also have a disparate impact, requiring employers to demonstrate the job-relatedness of the conviction. In a statement this past August to Associated Press, the EEOC's assistant legal counsel reported that "the problem is snowballing because of technology allowing these checks to be done with a fair amount of ease." See EEOC: Overusing Background Checks May Lead to Discrimination.
In New York State, the obligation for an employer to demonstrate the job-relatedness of any prior conviction used for making an employment decision has been codified into statute in the New York Corrections Law. Under that law (a copy of which, by the way, employers must post in the workplace, and, when ordering a background check the report on which contains any criminal conviction information, distribute to applicants or employees), prior to utilizing a prior criminal conviction in making a decision regarding employment, the employer must show: (1) that there is a direct relationship between one or more of the previous criminal offenses and the specific employment sought or held by the individual; or (2) the granting or continuation of employment would involve an unreasonable risk to property or to the safety or welfare of specific individuals or the general public. As to the former, the statute lists a series of factors to be considered, such as the specific duties and responsibilities of the job, and the nature, seriousness, and date of occurrence of the offense and the age of the individual at the time of occurrence.
Employers considering using background checks should consult legal counsel, in order to ensure that policies and procedures relating to such checks are compliant with applicable law.