New EEOC/FTC Joint Informal Guidance on Employers’ Use of Background Checks into Workers’ Criminal Records

On March 10, 2014, the Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC) issued their first joint guidance on employer use of background checks in hiring or firing decisions. The use of background checks by employers in personnel decisions is becoming a more tricky road to navigate. The EEOC enforces the Federal anti-discrimination laws and the FTC enforces the Fair Credit Reporting Act (FCRA), all of which can be implicated in the background check process, particularly when a third party credit reporting agency becomes involved. The EEOC/FTC joint guidance is reduced to two brief, non-technical documents — one for employers and another for job applicants respectively–called “Background Checks: What Employers Need to Know,” and “Background Checks: What Job Applicants and Employees Should Know.” The guidance for employers describes the information and documentation in a background check report that may be used lawfully to make personnel decisions about a job applicant or employee. The document for applicants identifies the employer’s obligations particularly when relying upon a background check to disqualify an applicant or employee.

Guidance for Employers
The EEOC/FTC guidance outlines employer best practices to obtain and use background reports in a legally permissible way, including:

  • Employers can require a background check and can ask questions about an individual’s background. However, employers cannot seek an individual’s genetic information (including family medical history). Employers already in possession of such genetic information cannot use it as the basis to make an employment decision.
  • Employers conducting background checks must comply with the federal anti-discrimination laws (and applicable state and local laws as well). An employer cannot discriminate based upon race, color, national origin, sex, religion, disability, genetic information or age (or other factors protected by state and local law). The employer must seek the same background information from all individuals.
  • Where a background check is prepared by an outside company, called a credit reporting agency, employers must ensure it complies with the FCRA. To obtain the report, the employer must first obtain the individual’s written permission. Further, the employer must certify to the third party preparer that the individual was notified of the background check; the individual gave written permission to obtain a report; the employer complied with the FCRA’s requirements; and the employer will not discriminate against the individual in violation of federal, state or local law. Prior to taking any adverse action based upon the report’s contents, an employer must provide the individual with a copy of the background check, and a notice of the individual’s rights under the FCRA.
  • Personnel or employment records must be preserved for at least one year after the records were made or the personnel action was taken, whichever occurs later. In certain circumstances for Federal Contractors, the time period is two years. An employer must properly dispose of background check reports from credit reporting agencies after an employer complies with applicable record-keeping requirements.

In addition to the guidance for applicants providing information about their rights when a background check report is requested, such guidance links to other resources and the EEOC’s “Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964” that suggests employers conduct individualized assessments before making an adverse employment decision.

Attorneys in the Gibbons Employment & Labor Law Department regularly assist employers with matters regarding background checks of employees or job applicants.

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