Employers Must Provide Negative Background Reports to Job Applicants Before Deciding not to Hire Them

The Fair Credit Reporting Act regulates employers who use background reports in the hiring process. Whenever a background report has negative information, the employer is required to send a copy to the applicant and given him or her a reasonable opportunity to comment or explain the contents of the report. For example, a background report may state the applicant was convicted of a felony when in fact the conviction was a misdemeanor. Or the report may have mixed the criminal history of a another person other than the applicant. In such cases, the applicant should be given the opportunity point...


Employers Cannot Force Job Applicants to Waive FCRA Rules Applicable to Background Reports

Today, the 9th Circuit Court of Appeals issued an opinion in a FCRA case, Syed v. M-I, LLC that involves background reports employers obtain on prospective employees. The background reports are “consumer reports” like credit reports subject to the FCRA rules. The FCRA requires employers to give applicants a written disclosure that they plan to obtain a background report. The purpose for the disclosure is to give applicants the opportunity to block the employer from obtaining a report, a matter of privacy. The disclosure must be consist “solely of the disclosure.” The employer M-I tried to insulate it from FCRA...


Bill to Curb Employers’ Misuse of Credit Reports

Bill to Curb Employers’ Misuse of Credit Reports The NY Times reports on a bill introduced by Senator Elizabeth Warren that would bar most employers from requiring applicants to disclose their credit histories or otherwise disqualifying applicants based on poor credit ratings. Employers are increasingly running credit checks on job applicants with the three national credit reporting agencies only too eager to add to their profits by selling credit reports to employers. The problem is that research has proven that people with poor credit histories are not automatically poor job prospects. Plus, credit reports are not always accurate making the...


Background Check Companies Errrors’ Hurt Applicants

A MSNBC report focuses on the problem of background check companies confusing one person with another with the result that applicants lose job opportunities. MSNBC interviewed a Ms. Catherine Taylor who the Red Cross wanted to hire her as an accountant. She was not hired after a Choice Point criminal background check came back with a rap sheet of drug felonies. The rap sheet was for a different Catherine Taylor who lived in another state. In another case, after Leonard Smith applied for a job, Sterling Information Systems confused him with a sex offender, who was in prison at the...


Call for Trans Union to Stop Selling Employment Credit Reports

Recently a woman was fired by her employer (Bain & Co. no less) for having excessive student debt. She started a petition to Trans Union asking them to stop selling credit reports to employers. The petition states that TransUnion, the world’s largest privately held credit reporting company, promotes credit history as a measure of character and suitability for employment. Some 60% of employers surveyed report they consult credit reports for job applicants, a practice that has left many qualified applicants out of work. The reasons TU should stop this practice are as follows: First, credit checks in hiring create a...

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