Flawed Employment Background Check Procedures Highlighted by Recent Legal Actions

Recent headlines reveal that many employers are not following sound employment background check procedures. Faulty policies and procedures fall into three general categories: 1) Failure to Conduct Background Checks that “Fit” the Job, 2) Sloppy Criminal Record Checks, and 3) Failure to Comply with the Law, especially the FCRA.

1. Failure to Conduct Background Checks that “Fit” the Job

No Background Check – Nearly all jobs justify at least a basic background check. “In God we trust, everyone else must have a background check.” Employers are expected to conduct due diligence to protect themselves, their employees, their customers, and the public. Notice that when an employee commits a crime, the news stories always talk about whether a background check was conducted.
The Same Background Check for All Jobs – A one-size-fits-all approach simply means that an employer is paying too much for background checks for lower risk jobs while at the same time creating unnecessary exposure for higher risk jobs.
Reliance on Criminal Record Checks Only – Far more applicants lie about or exaggerate their work history, education, certifications, etc. than have criminal records. A prudent employer will conduct a background check that verifies everything in an applicant’s history that is important to the job being filled.

In today’s litigious society and given the high number of applicants who lie about or exaggerate their backgrounds employers take on significant unnecessary risks if they fail to conduct adequate background checks. Bad publicity and negligent hiring lawsuits are common when inadequate background checks were conducted and harm comes to fellow employees, customers, or the public.

2. Sloppy Criminal Record Checks

Misuse of Criminal Database Searches – Criminal databases are notoriously inaccurate, incomplete, and out of date. In the hands of an expert they can be a great research tool, however criminal database searches should never be relied upon as the sole criminal record check source in a background check. Database searches are usually marketed as “Instant” and “Inexpensive” — real background checks are not cheap and take at least a few days.
Inquires into Arrest History – Except for actions currently in process, inquires into and use of an applicant’s arrest history are usually off-limits to employers.
Blanket or One-Size-Fits-All Prohibitions against any Criminal History – EEOC regulations clearly require that a criminal record must be job related and within a reasonable time period to disqualify an applicant. Different jobs will have significantly different criteria with regards to prior criminal history.

3. Failure to Comply with the Law, especially the FCRA

Failure to Comply with the FCRA attracts Class Action Lawsuits – The recent spate of class action lawsuits commonly identify provisions of the FCRA (the miss-named Fair Credit Reporting Act) that employers fail to properly implement when using information obtained from a third party such as a background check company, credit bureau, or database company. The FCRA provisions commonly cited require, among other things:

  • Background check disclosure in a separate document (e.g. not part of the job application, does not contain a liability waiver)
  • Written applicant authorization
  • Pre-adverse action notification with sufficient opportunity for the applicant to respond if any adverse action is being considered based in part on information from the third party
  • A final adverse action notification

Overlooking State and Local Laws and Regulations – More states and local government entities are instituting laws and regulations regarding employment background checks. Some of the areas that have received increased attention recently include regulated services, professions, and persons (e.g. those working with children and the infirm), use of credit reports, and inquiry into and use of criminal histories.

Employers need to implement sound employment background check practices and stay compliant with the changing requirements imposed by federal, state, and local laws and regulations.


Key Employer Takeaways:

  • Avoid the unnecessary risk of bad hires, bad publicity and negligent hiring liability with background checks tailored to each job. Verify prior employment, education and other relevant factors.
  • Avoid database-only criminal checks. Avoid inquires into arrest history (except for current actions). Avoid one-size-fits-all prohibitions against a prior criminal record.
  • Comply with the FCRA and keep current with federal, state, and local laws and regulations.




Note: This information is for educational purposes only and should not be used as a substitute for professional legal advice.

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