Improper Criminal History Checks Resulted in $6 Million Dollar Lawsuit Payout

On November 18, 2019, the Equal Employment Opportunity Commission (EEOC) announced in a press release that they settled a race discrimination lawsuit with a nationwide retailer which challenged the employer’s use of criminal history for employment purposes. The hiring process can vary by the employer and industry, that’s why it’s vital that employers determine what is needed for their background check program.

In this particular case, the EEOC claimed that the employer’s use of a criminal history check resulted in a disparate impact against minority workers. As a result, the EEOC required the employer to pay $6 million, as well as hire a criminologist if they continue to consider using criminal history checks as part of their pre-employment process. To avoid lawsuits and fines, employers can work proactively to ensure that their current background check policy is up-to-date.

What is a Criminal History Check?

A criminal history check is one of many background check solutions that employers can use to help them determine a safe hire. This type of check reveals detailed information about an individual’s county, state, and/or federal criminal history. Each record will vary by the type of information that is searched for and the results that it returns. By providing an employer with the knowledge of an applicant’s criminal history, they can better understand if they would make a good fit for the company. Criminal history checks benefits employers by:

• Reducing risk
• Protecting an organization’s assets and reputation
• Reducing incidents on the job
• Preventing lawsuits, fines, and fees

What Should Employers Do?

To further protect their company from potential risks and fines, it’s suggested that employers follow these best practices when conducting criminal history checks for their place of business.

• Creating and implementing a clear and concise written background check policy.
• Know and understand the laws regarding the use of criminal history information and train managers, HR officials, etc. accordingly.
• Eliminate policies or practices that would exclude someone from employment based on a bright-line rule (any criminal record or felony).
• Maintain confidentiality when handling an applicant’s or employee’s criminal history information and only use it for the purpose for which it was intended.
• Following the rules set forth by the Fair Credit Reporting Act (FCRA).

Fair Credit Reporting Act (FCRA)

In addition, employers must also abide by the rules of the Fair Credit Reporting Act (FCRA) when running background checks. In order to be compliant, the FCRA requires that an employer meet the following:

• Permissible Purpose - An approved reason under the FCRA to conduct a background investigation (e.g., credit, employment, tenant screening, insurance, government license, child support enforcement, or court order)
• Disclosure – Before ordering a background check, employers must provide a disclosure in a clear and conspicuous written document.
• Authorization – The employer must obtain written authorization from the candidate, consenting to perform a background check.
• Adverse Action – Employers must follow the adverse action process before denying employment based upon the background report.

Despite it being the law, many companies fail to send adverse action notices. It’s important that your HR and compliance department remain up-to-date on all hiring requirements and procedures to avoid violations and/or lawsuits.

How DISA Can Help

DISA offers a variety of background check solutions to enhance your employment screening process. When creating a background check program, it’s important for employers to understand exactly what is needed for the positions they are hiring for, as well as any industry-specific requirements. DISA’s unique service offerings include customized product packages, individual products, online ordering, automatic renewal notices, and applicant entry to help you create a customized program to fit your needs.

When ordering a background check, it can be done “a la carte” or through a package customized to meet your specific needs. Our products include:

• Criminal History Checks (Federal, State, and County)
• Civil Searches (Federal and County)
• SSN Validity Checks
• Employment Verifications
• Education Verifications
• I-9 and E-Verify
• State Driving Records
• Professional Licenses and Credentials
• Credit Reports
• Adverse Action Notices
• Personal Reference Verifications
• Government Sanctions Lists
• Sex Offender Searches
• DOT Testing History
• Criminal Investigative Services

Helpful Links:

• The Equal Employment Opportunity Commission
• EEOC Press Release

DISA can help! Get answers directly from DISA’s subject matter experts with ‘Ask DISA’

Visit www.askdisa.com to ask your questions today.

Founded in 1986, DISA is the industry-leading provider of employee screening and compliance services. Headquartered in Houston, with more than 35 offices throughout the U.S. and Canada, DISA’s comprehensive scope of services includes drug and alcohol testing, background check, occupational health, and transportation compliance. DISA assists employers in making informed staffing decisions while building a culture of safety in their workplace.