Duty of Employers When Rejecting Candidates Due to Background Screening Results

Hiring Manager Reviewing Resume During Job Interview / rejecting candidates due to background screening resultsWhen employers elect to utilize results of an employment background check in making a hiring decision, they must follow federal law to ensure they are not violating consumer protection rights. This is especially important when rejecting candidates due to background screening results.

The Fair Credit Reporting Act (FCRA) specifically states that employers must do the following:

  1. Provide a copy of the background screening report
  2. Provide a written description of the applicant’s rights under the FCRA before taking adverse action.

This protection is put in place to ensure that employers are utilizing the most accurate and up-to-date information from public records when procuring reports for employers.

Since employers are making these requests for employment purposes, they must provide a disclosure and authorization form.

The FCRA directs employers to make a “clear and conspicuous” written disclosure to the job applicant about the background check in a document that consists “solely” of the disclosure. This means employers must separate the disclosure and authorization form from any additional employer onboarding forms such as the job application, payroll, health insurance, I-9, etc.

Allied Solutions, a large insurance organization, was recently held liable for violating both of the FCRA provisions mentioned above. Allied Solutions took adverse action against applicant Shameca Robertson due to “non-conviction” information that was included in her employment background screening report.

Following their hiring decision, the organization failed to provide Robertson with a copy of the report and rights under federal and state law to dispute the information. Robertson was only informed by Allied Solution’s Human Resources department that the offer was being rescinded due to “information in her criminal background check report.”

The disclosure and authorization form signed by Shameca Robertson authorizing the background check had additional language that did not make the form “clear and conspicuous.” In addition to this, the form was not separate from any additional employer forms, which violated the requirement of the disclosure and authorization form needing to be “stand alone” and not accompanied by any other employer forms.

Robertson decided to file a lawsuit on behalf of a distinct subclass against Allied Solutions claiming they violated two provisions of the FCRA. The first violation was failing to furnish a clear and conspicuous disclosure and authorization form. The second claim was for failing to provide a copy of the background screening report and providing written summary of rights under the FCRA. After mediation in April 2016, the parties reached a tentative settlement agreement.

A month later, the Supreme Court decided in Robertson v. Allied Solutions, LLC, No. 17-3196 (7th Cir. 2018) that a plaintiff has to allege an injury has occurred that is both concrete and particular to himself or herself.

Robertson attempted to file an Article III claims; however, the courts dismissed the case due to there not being presence of “concrete injury” and “had no standing.” If Robertson filed a claim due to the “non-conviction” information Allied Solutions, Inc. used in making their employment decision, she would have had evidence of concrete injury and actual harm done due to the job offer being rescinded based on inaccurate information contained in her background screening report.

As a reminder when rejecting candidates due to background screening results, employers should only use “convictions” that have been disposed within the last seven years to comply with updated “Ban-the-Box” compliance.