January

Employers who use a third party to conduct a background check on an applicant or employee for employment purposes must comply with the FCRA. But what many employers may have forgotten, is that the Fair and Accurate Credit Transactions Act (FACTA) also imposes upon them some obligations when conducting a background investigation. The FACTA is a 10-year-old law enacted by Congress to combat identity theft. The FACTA amended the FCRA by fixing a problem that required employers who retain a third party to investigate workplace misconduct to comply with the FCRA 's four-step process: the disclosure, authorization, pre-adverse notice and adverse notice procedures. Employers who engage a third party to investigate workplace misconduct no longer have to provide advance notice to the employees under investigation, obtain their prior consent, or disclose the contents of the investigator 's report prior to taking adverse action based on the report. However, employers still have some obligations to employees when they have an outside person or agency do an investigation under the FACTA. They must provide some summary information, but they do not have to provide even this information unless and until they take an adverse action. Remember, the FACTA is the exception, not the rule. Given the increase in FCRA class lawsuits, employers that use background checks for employment purposes must ensure they are taking proper steps to ensure compliance with the applicable provisions of the FCRA.

A class-action lawsuit against Disney serves as a stark reminder that employers better follow the letter of the Fair Credit Reporting Act when it comes to notifying job candidates or employees about adverse actions against them due to something that showed up in a background-screening report. With an increasing number of employers facing lawsuits under the Fair Credit Reporting Act based on actions taken -- or not taken -- during their recruiting and hiring procedures, experts and employment attorneys are cautioning them to know the letter of this law before deciding on any job candidate. More importantly, if they're going to decide not to hire someone because of what turned up in a background check, they'd better cross their t's and dot their i's when it comes to notifying the applicant about the decision that's about to be made. The latest to be pulled into the fray, Disney, is accused of knowingly violating the FCRA by failing to provide job applicants and employees with adverse-action notices and copies of background reports prior to negative decisions being made. In the class-action lawsuit, Culberson v. The Walt Disney Company, Robert L. Culberson claims Disney illegally barred him from employment by failing to provide him with the notice -- required by the FCRA when an adverse-employment decision is based on any portion of a background check.

"The ""ban the box"" movement continues to sweep through state legislatures. Recent legislation in two states applies ""ban the box"" prohibitions to private employers in the state. On December 1, a new North Carolina law went into effect that prohibits employers from inquiring about arrests, charges or convictions that have been expunged. This prohibition applies to requests for information on applications and during interviews with applicants. In addition, applicants are not required to disclose expunged arrests, charges or convictions. .On January 1, 2014, a new Minnesota law goes into effect that prohibits employers from inquiring into, requiring disclosure of or considering the criminal record or history of an applicant until the applicant has been selected for an interview or, if there is no interview, until after a conditional offer of employment has been made. "