On March 10, 2014, the U.S. Equal Employment Opportunity Commission (EEOC) and the Federal Trade Commission (FTC) jointly released two pamphlets on the use of background checks in the workplace: (a) one directed at employers and (b) the other at applicants and employees. The two documents, Background Checks: What Employers Need to Know and Background Checks: What Job Applicants and Employees Should Know, may be found on the EEOC’s website. Although these documents are the first official federal insight on this topic since the 2012 release of the EEOC’s Enforcement Guidance on the Consideration of Arrest and Conviction Records, with one or two exceptions (discussed below), the documents do not break new ground; rather, they reiterate known “best practices” related to background checks in the employment context.

While acknowledging that “it’s not illegal for an employer to ask questions about an applicant’s or employee’s background, or to require a background check,” the publications remind employers that any such inquiries must comply with the federal Fair Credit Reporting Act (FCRA), if the background information is being obtained from a consumer reporting agency (CRA), as well as Title VII of the Civil Right Act of 1964. Although the documents do not detail all legal requirements or “best practices” under these laws, they emphasize that employers should take the following steps:

• Treat all applicants/employees equally regardless of the individual’s race, national origin, color, sex, religion, disability, genetic information, and/or age.

• Obtain a validly signed Disclosure and Authorization form (D&A form) from an applicant/employee, prior to obtaining a consumer report from a CRA.

• The D&A form should be in writing and in a stand-alone format that consists solely of the legally required disclosures and authorization.
• The D&A form should not be included in the employment application.
• If the employer will be seeking an investigative report (a special type of consumer report based on personal interviews), the employer must tell the applicant/employee of his or her right to request information on the nature and scope of the investigation. (Interestingly, the FTC made no mention of the form, “A Summary of Your Rights Under the Fair Credit Reporting Act,” in connection with the discussion on investigative reports. Some employers provide a copy of this summary of rights as a disclosure in the D&A form in what is perceived to be a conservative interpretation of requirements under the FCRA.)

• Ensure that employers have made proper certifications to any applicable CRAs concerning the employer’s responsibilities under the FCRA.

• Provide an applicant/employee with a pre-adverse letter notice prior to taking an adverse action.

• This pre-adverse action letter should include,
  • a copy of the consumer report in question; and
  • a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.”

• Although not explicitly included in the newly-issued publications from the EEOC and FTC, this letter also is a good place for employers to invite the recipient to explain any negative information or provide additional context.

• Utilize an adverse action letter if the employer is taking an adverse action against an applicant/employee that is based, in whole or in part, on a consumer report provided by a CRA.

• This letter should include the following:

• that the applicant/employee was rejected because of information in the consumer report (which, importantly, is not required by the federal FCRA);
• contact information for the CRA that provided the report;
• that the CRA did not make the hiring decision and cannot provide specific reasons for it; and
• that the applicant/employee has the right to dispute the accuracy or completeness of the report and obtain an additional free copy from the CRA within 60 days.

• Retain all personnel or employment records for at least the appropriate period of time under the law (per the jointly-released publications, for most employers, at least one year after the records were made, or after a personnel action was taken.) The employer publication also includes a link to EEOC’s summary of selected recordkeeping obligations. We recommend that certain records be kept for longer periods. For guidance on the period of time to keep these records, contact the Ogletree Deakins attorney with whom you normally work.

• Properly dispose of all consumer reports and information gathered from the reports once the applicable record-keeping period is over.

• Proper disposal can include burning, pulverizing, or shredding hard copy documents or permanently deleting electronic information.

These publications should serve as a reminder that both the EEOC and FTC are making enforcement of the FCRA and Title VII a top priority. Employers that utilize background checks should ensure that their processes and procedures comply with these laws.

Employers should note that these federal requirements are in addition to state requirements on the use of background check information. Federal and state background check requirements are summarized in the firm’s O-D Comply: Background Checks subscription materials, which are updated and provided to O-D Comply subscribers as the law changes.