Supreme Court Reshaping Patent Law

May 28, 2014

Recently, the EEOC and the FTC issued joint guidance to employers, employees, and applicants on the use of background checks. The pinnacle consideration is to ensure that specific individuals or groups are not unfairly targeted. Prior to conducting a background check, an employer must receive the employee’s or applicant’s written permission. The employer must reveal the scope of the background check and inform the party that any information received may result in an adverse employment action. The guidance, however, warns employees and applicants that refusal to provide permission may result in the denial of employment or termination.

If the background check reveals information that warrants an adverse employment action, the employer must take the following actions:

1. Provide the employee or applicant “A Summary of Your Rights Under the Fair Credit Reporting Act” as provided by the background screening entity.

2. Advise the employee or applicant that they were rejected or terminated due to information revealed on the background check.

3. Provide the employee or applicant with the name, address, and phone number of the entity that conducted the report.

4. Advise the employee or applicant that they may dispute the report and receive an additional free report from the entity within sixty days.

If an adverse employment action is taken, the background check and any related records must be retained for one year (two years for educational, government, and federal contractor entities). After the retention period, the employer may dispose of the background check through a secure process.

Employers must be mindful that a lack of compliance with this guidance presents liability issues and violations of the Fair Credit Reporting Act. Further, employers must be mindful of state and local ordinances that may apply. Specifically, many government entities have implemented “ban the box” initiatives, which restrict an employer’s ability to inquire into the prior criminal history of employees and applicants.

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