Disney Lawsuit Highlights FCRA Rules for Hiring Decisions Motivated by Criminal Background Checks

By Michael Klazema on 1/7/2014

Background checks can be a great way for employers to disqualify criminals and potentially dangerous individuals from their applicant pools. They can reduce company risk and liability, protect customers and other employees, and bar dangerous applicants from gaining a position of power that may allow them to commit further crimes. However, while background checks have grown increasingly common in pre-employment screening over the past decade or two, they have also inspired complicated legal and ethical questions that have sparked many a lawsuit. Quite simply, an employer needs to tread carefully when using a background check to remove an applicant from employment consideration.

That much has been proven by a recent lawsuit between the Disney Company and an applicant whom the company considered for a job back in 2011. Disney ultimately disqualified the applicant from consideration due to criminal conviction on his record. So far, the case sounds almost identical to countless other employment decisions that have been made on the basis of past criminal activity. After all, vendors like do most of their business by offering sweeping checks that look into everything from an applicant’s criminal record (at both a state and federal level) to their academic and professional past.

However, the lawsuit gains traction thanks to FCRA (Federal Credit Reporting Agency) guidelines that the plaintiff alleges were ignored by Disney. The FCRA statute cited in the lawsuit states that employers, if they want to reject or disqualify an applicant based on any background check findings, must furnish that applicant with a written notice explaining the decision. The notice must be delivered to the applicant prior to the finalization of the hiring decision, primarily so that the applicant has a chance to peruse a copy of the background check report and dispute any of its findings. In other words, the FCRA statute is designed to prevent inaccurate or out-of-date information from impacting an employer’s hiring decisions or from hurting an applicant’s employment chances.

In this case, the information actually was out of date: the applicant’s crime – an Assault & Battery charge from 1998 – was 13 years old by the time he was being considered for the Disney job and had actually been legally expunged from his record by the state of California. Since the plaintiff, a man named Robert L. Culberson, had been 19 years old when the crime had occurred, the state had seen fit to give him a clean record and a second chance at finding employment.

However, since Disney’s background check turned up the expunged charge – and since the entertainment company did not give him a chance to explain the charge – Culberson believes he was unfairly and unlawfully dismissed from consideration. Furthermore, since Disney did not issue a written notification concerning the reasoning for its decision, opting instead to inform him verbally, Culberson likely has a strong case on his hands.

The moral of the story? Employers should tread carefully when deciding to dismiss applicants based solely on a background check finding. All decisions should be explained and communicated to applicants in writing rather than in verbal terms, and applicants should always be allowed to dispute incorrect background check information. As for applicants: issues like this can be easily avoided if job hunters would simply run a background check on themselves prior to commencing their job search. Background checks can pull up inaccurate information on a regular basis, and the only person who can tell what is correct and what is inaccurate is the applicant.


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