BEST PRACTICE TIP: CRIMINAL BACKGROUND CHECKS OF POTENTIAL EMPLOYEES ONLY UNDER CERTAIN LIMITED CONDITIONS


May 8, 2013

Companies today that routinely perform criminal background checks as part of their hiring process run the very real danger of running afoul of the Fair Credit Reporting Act (FCRA) and other federal and state statutes. Generally speaking, an employer may conduct a criminal background check only with the consent of the job applicant. Upon receiving the report, the employer must provide a copy of the report to the applicant along with a written notice of rights under the FCRA. The requirements are confusing and the costs for not complying are high as Pennsylvania's very own Toll Brothers, Inc. is finding out.

In the recently filed putative class action, it is alleged that Toll Brothers did not comply with the basic FCRA requirements set forth above. If this is true, Toll Brothers will be responsible not only for the damages to a nationwide class of unhappy job applicants, but also be responsible for statutory damages, punitive damages and the attorneys' fees of the plaintiff class, all in addition to their own counsel fees.

Notwithstanding this recent class action, a criminal background check is a useful tool when it is related to the employment being offered. For example, a bank seeking candidates to work as a teller would want to know if a job applicant has convictions for drugs and theft. No problem here as long as the bank complies with the requirements under the FCRA and Pennsylvania state law. On the other hand, perhaps a background check is not relevant to a landscaping company who is seeking employees to cut grass over the summer. The Pennsylvania Human Relations Commission has weighed in on this recently and stated that employers "must be able to show the inquiry into conviction is substantially related to an applicant's suitability to perform major job duties and required by business necessity."

I hope this entry makes clear that every employer needs to clearly understand the risks and benefits of conducting a background check. A decision to have a mandatory background check as part of a hiring process, or even when to conduct such check, is or should be a very fact specific situation. To discuss this in greater detail or any other employment related legal issues; please feel free to contact Douglas Leavitt at Danziger Shapiro & Leavitt, P.C.

This entry is presented for informational purposes only and is not intended to constitute legal advice.