Learning Center & Resources for Employers

Kenneth Morales • January 11th, 2012

School committees and boards tightening background check policies

With the slate of recent negative news items featuring school officials and employees caught in or accused of criminal activitiy and offenses against children it was to be expected that some of the new year resolutions for schools would focus on reviewing and improving their own background check policies. Officials at the Wellesley school voted to adopt stricter regulations in order to close the gap in how the district runs background checks.

HubSpot System • January 8th, 2012

University of Alabama Hires Coach with DUI Twice

The University of Alabama recently hired a head football coach with a DUI on their record. Garrick McGee, former offensive coordinator from the University of Arkansas, was hired as the head coach replacing Neil Callaway, who also has a DUI arrest on his record. In addition to McGee’s arrest and guilty plea for DUI in 2008, he had also pleaded guilty to theft and paid restitution in 1991 when he was with the Arizona State Sun Devils. As would be expected, the University of Alabama is experiencing a lot of backlash for this hiring choice, as it did in 2006 when it hired Callaway.

Kenneth Morales • January 7th, 2012

Day Care Sued After Employee Accused of Molestation

Santa Clara County District Attorney's Office charged Keith Woodhouse on 30 counts of lewd and lascivious acts on a minor in February of this year. In November, the families of two of the young girls filed a lawsuit against Woodhouse’s former employer, Child Development Inc, who they claim did not perform an adequate background check on Woodhouse.

Schools Across the Country Re-Evaluating Background Checks

Since the Penn State coach scandal, there has been a rush nationwide to reform and re-evaluate the way schools are conducting background checks on all of their employees. The truth is, some schools and schools districts just do not do complete background checks on those who are employed with them including teachers, administrators, support staff and of course, coaches. Those school districts that do run background checks on their employees do not run a complete national criminal background check, or only do local state checks. This is likely not enough to get a complete understanding of someone’s criminal background.

HubSpot System • January 3rd, 2012

New State Law in Pennsylvania Makes Background Checks Mandatory

In a move that has been met with some controversy, the state of Pennsylvania recently put a law into effect that now makes it mandatory for all employees of private, public and vocational schools to undergo a criminal background check. Though this is definitely something that most parents will cheer on, unfortunately it could mean the termination for some teachers, aides and administrators who may currently be employed by the schools.

Kenneth Morales • January 2nd, 2012

School Chaperone’s are Safe, Right?

If you think the chaperones that are going along with your children’s school trips are safe, you may be sorely mistaken. According to research, most school chaperones are not subject to background checks. This information came to light after a fourth grade school field trip in Seattle. Just last week on December 15th, 2011, a fourth grade parent who was accompanying his child on a field trip recognized another parent who was also chaperoning. This doesn’t sound extremely unusual, until you realize that the second parent was recognized because he was a felon on “Washington’s Most Wanted” list.

HubSpot System • December 30th, 2011

Are You Not Getting Hired? It Could Be Your Background

It is a tough time to be looking for a job, but it can be even tougher when you have all of the experience, a perfect resume and you are still getting passed over for the jobs. There could be a reason you are getting passed by...it could be your background. Before an employee will hire you, many will do personal background checks on your criminal record. Additionally, they may be pulling information on your driving record through a motor vehicle report. If they see any of this information as negatively impacting the job, they may pass you by and choose another candidate.

Kenneth Morales • December 20th, 2011

Pizza Chain and Major Bank Sued in Class Actions for Technical FCRA Violations

Plaintiff's law firms are suing large employers for technical violations of the disclosure requirements of the FCRA. At the beginning of the summer, we noted a class action where a plaintiff class asserted that the inclusion of the FCRA disclosure in the job application entitled the class to statutory damages of $670,000 to $6,700,000. Shortly after that, we noted a case where a company had settled a claim that the FCRA disclosure was invalid because it was not separate for $1,200,000.

We now see that a plaintiff's firm has filed class action cases against a major pizza chain and a major bank. In the pizza chain case, the plaintiff alleges that the disclosure is invalid because the disclosure form included a release of liability. In the bank case, the plaintiff alleges that the bank included its FCRA disclosure in a document covering all of the terms and conditions of employment and which contained a release of liability, instead of having the disclosure in a separate document, as the FCRA requires.This type of claim appears to be the plaintiffs firms' favorite type of claim right now, because it is simple to prove and opens up the possibility of statutory damages ($100 to $1,000 per defective disclosure), uncapped punitive damages, and attorney's fees.

After Coaching Scandals, the Importance of Background Checks Come to Light

In the past month, there have been several instances of coaches being accused of sexually explicit crimes against the children they are supposed to be teaching and encouraging. What this has done is caused a huge increase in the amount of criminal record checks being done on those men and women who work so closely with our children. As an employer of these coaches, or anyone for that matter, the importance of looking at employee backgrounds can make a big impact on how your organization is seen by the public and can prevent others from getting hurt.

Amendment to California Civil Code 1786 Goes Into Effect January 1, 2012

This amendment is in addition to current California law requiring employers to provide extensive consumer notification before a background check is conducted by an outside screening company. Consumer notifications must:

State the purpose of the report.
Give the name, address, and telephone number of the screening company.
Include a summary of consumer rights to see and copy any report about the subject of the report.
Include a box to check allowing the consumer to request a copy of the report.

The Disclosure and Authorization Notice sample is located in the Compliance section of your backgroundchecks.com account.

For more information on how this update may affect your screening program and how backgroundchecks.com can help, please contact customer service.

Kenneth Morales • September 30th, 2011

Background Screening 201 : Employment and Education Verifications – So Straightforward it Hurts

Good morning folks! Today we turn from the different types of criminal history searches that backgroundchecks.com performs to education and employment verifications – two of the most common services we provide.

HubSpot System • September 15th, 2011

backgroundchecks.com Legislation and Compliance Update - California Senate Passes AB 22

The California Senate has passed, and the governor is expected to sign, AB 22 limiting the use of consumer credit reports for applicant screening and other employment purposes.

Kenneth Morales • September 14th, 2011

Plaintiff need not proof that defendant is a CRA under the FCRA to survive a motion to dismiss

Robins v. Spokeo, Inc., 2011 U.S. Dist. LEXIS 54102 (C.D. Cal. May 11, 2011) Facts: On January 27, 2011 , the Court dismissed Plaintiff's Complaint for lack of standing and gave Plaintiff twenty days to amend to meet the standing requirements. On February 16, 2011 , Plaintiff filed an amended complaint and alleged that Defendant operated its website, Spokeo.com, in violation of the FCRA. Specifically, Plaintiff claimed that reports generated by Defendant contained inaccurate consumer information that was marketed to entities performing background checks. As a result of Defendant's FCRA violations, Plaintiff alleged that Defendant caused him actual and/or imminent harm by creating, displaying, and marketing inaccurate consumer reporting information about Plaintiff. In response to Plaintiff’s amended complaint, Defendant brought a second Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and (12(b)(6) arguing that it could not be sued for FCRA violations because it was not a consumer reporting agency (“ CRA ”). Defendant’s Motion to Dismiss was denied. · Subject Matter Jurisdiction. Defendant argued that the Court did not have subject matter jurisdiction to consider Plaintiff's claims. The Court disagreed. A plaintiff has Article III standing to sue where the plaintiff alleges facts showing that (1) it has suffered an injury in fact; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely that the injury would be redressed by a favorable decision. In light of Plaintiff's amended complaint, the Court found that Plaintiff alleged sufficient facts to confer Article III standing. Specifically, Plaintiff alleged that Defendant marketed inaccurate consumer reporting information about Plaintiff in violation of the FCRA, which was likely to be redressed by a favorable decision from this Court. Thus, Plaintiff established the requisite standing to sue and the Court had subject matter jurisdiction over Plaintiff's claims. · Motion to Dismiss . Alternatively, Defendant moved to dismiss Plaintiff's amended complaint pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim, asserting, among other things, that Defendant was not a CRA under the FCRA. · Consumer Reporting Agency. Defendant contended that it was not a CRA as defined by 15 U.S.C. § 1681a(f) because it did not regularly engage in providing consumer credit information for the purpose of furnishing consumer reports. Conversely, Plaintiff alleged that Defendant fell within the scope of FCRA because Defendant collected and created consumer information consisting of consumers’ economic wealth and creditworthiness for the purpose of furnishing it to paid subscribers who regularly provide monetary fees in exchange for Defendants s reports. The Court denied Defendant’s Motion to Dismiss Plaintiff’s FCRA claims holding that Plaintiff’s complaint needed only to contain sufficient factual matters that, if accepted as true, would state a claim to relief that was plausible on its face. Plaintiff did not need to prove that Defendant was in fact a CRA at the initial dismissal phase of the litigation. Thus, Plaintiff’s allegations that Defendant regularly accepted money in exchange for reports that contained data and evaluations regarding consumers’ economic wealth and creditworthiness were sufficient to support a plausible inference that Defendant’s conduct fell within the scope of the FCRA. About Strasburger & Price Attorneys from Strasburger & Price, LLP involved in FCRA litigation have been monitoring and analyzing the legislative and caselaw developments related to this area of the law. This group of lawyers will continue to follow these developments throughout the coming months to help you understand how it impacts your business as well as to help you make the necessary decisions to succeed under this ever changing area of credit reporting and employment screening/criminal and credit background check compliance. Click here to find out about our authors.

backgroundchecks.com Legislation and Compliance Update - Louisiana Enacts E-Verify Legislation

On July 1, 2011, Governor Bobby Jindal signed HB 646 into law, creating Act 402. Act 402 revises Louisiana’s existing immigration provisions to require employers to perform some form of employment eligibility verification to check on the immigration status of their employees.

Kenneth Morales • July 21st, 2011

Federal Trade Commission Issues New Guidance on the Fair Credit Reporting Act

In 1990, the FTC issued a commentary on the FCRA (published as an appendix to 16 CFR part 600). Between 1997 and 2001, it issued informal opinion letters in response to selected questions that it received. Changes to the FCRA, primarily in 1996 and 2003, rendered much of the prior commentary obsolete. The new guidance reflects the FTC’s most up-to-date guidance.

Additionally, the FTC has formally withdrawn its prior commentary. In a press release, the FTC notes that the reason for this is that the recent financial reform legislation transferred the FTC’s authority to issue this kind of guidance to the newly created Consumer Financial Protection Bureau.

The FTC says that the new guidance mostly codifies its prior positions, but that it modifies some of its prior interpretations. Therefore,.

Please see below for links to the documents referenced in this update:

The report is available at http://ftc.gov/os/2011/07/110720fcrareport.pdf.
The withdrawn commentary is available at http://www.gpo.gov/fdsys/pkg/CFR-2010-title16-vol1/pdf/CFR-2010-title16-vol1-part600-app-id1020.pdf.
The informal staff opinion letters are available at http://www.ftc.gov/os/statutes/fcra/index.shtm.
The formal withdrawal of the prior commentary is available at http://ftc.gov/os/fedreg/2011/07/110720fcrafrn.pdf.
The FTC’s press release is available at http://ftc.gov/opa/2011/07/fcra.shtm.

For more information on this update may affect your program and how backgroundchecks.com can help, please contact client services.

Kenneth Morales • July 21st, 2011

FTC Says Screening of Volunteers is for Employment Purposes Under the FCRA

Legal

FCRA

In its newly issued staff report that updates its guidance under the Fair Credit Reporting Act (FCRA), the Federal Trade Commission (FTC) says that the term employment purposes includes “a nonprofit organization staffed in whole or in part by volunteers.” (See page 32 of the report.)

The sources cited in the footnote for this assertion do not support it. The first source cited there is Hoke v. Retail Credit Corp. in that case, the court construed the words employment, promotion, and reassignment in the definition of “employment purposes” have “specific meanings in the area of activities for the production of income.” By definition, volunteering is not an activity for the production of income. The other two sources that the footnote cites, the Allison and Solomon information staff opinion letters, both deal with cases in which the activity in question was income-producing (independent truck drivers in Allison and title insurance agents in Solomon).

However, courts often defer to the FTC’s guidance on matters under the FCRA. Therefore, , including disclosure, authorization, and pre-adverse-action notices.

Kenneth Morales • July 6th, 2011

North & South Carolina and Oklahoma Enacts E-Verify Bill

On June 23, 2011, Governor Perdue signed HB 36, requiring employers and local governments to begin using E-Verify.

Some exceptions do exist, including exceptions regarding who must be screened.

On June 28, 2011, Governor Haley signed SB 20 which requires in part that employers use E-Verify to check employment eligibility for all employees.

Under HB 440, all SC employers have been required to perform some form of employment eligibility verification since July 2010. Click here for more details on SB 20.

The Oklahoma Supreme Court has upheld the Oklahoma Taxpayer and Citizen’s Protection Act of 2007 (HB 1804).

If you would like more information about how these updates may affect your program and how backgroundchecks.com can help, please contact customer service.

backgroundchecks.com Legislationand Compliance update - Louisiana bill forcing contractors to use E-Verify unanimously passes state House

The Louisiana House has unanimously voted 100-0 to forbid any public body from giving contracts to businesses that will not agree to monitor their workforce for undocumented aliens. The 100-0 vote on Senate Bill 66 now sends the legislation to the state Senate to approve any changes the House made to the bill.

The bill requires contractors to use E-Verify to check on their employees’ legal status. Contractors must use that system in order to qualify for a project bid, and failure to use the system after a bid has been accepted could result in the cancellation of the contract. Additionally, the contractor could be barred from either bidding on, or receiving, state contracts for as many as three years.

Kenneth Morales • June 17th, 2011

Alabama Governor Signs Law Requiring All Businesses to Begin Using E-Verify

On June 9, 2011, Alabama Governor Bentley signed HB 56, which is similar to Arizona's immigration legislation.

Penalties for violations include probation, the loss of business license for the offending location, and ultimately the loss of business license for all locations throughout the state.

Kenneth Morales • June 6th, 2011

Employers Settle FCRA Documentation Class Actions for $5.9 Million

First Transit and First Student are apparently related companies that provide transportation services to school. They recently settled class action claims against them for three alleged violations of the Fair Credit Reporting Act:

One important lesson from this case is in how to make the required disclosure. The FCRA requires an employer to present the disclosure to the consumer “in a document that consists solely of the disclosure,” but allows the employer to include the required authorization in that document. For example, the disclosure must not be in the employment application. According to one of the pleadings in the case, the document included a release of liability for the consumer reporting agency. Since the case was settled, we can’t know whether the plaintiffs would have won, but drafting to the most extreme possible interpretation of the FCRA could have avoided the claim.

Another important lesson is the impact of big, disruptive events. The websites of First Transit and First Student both reflect that they acquired Laidlaw in 2007. Large acquisitions like this one are usually followed by rapid consolidation, including the acquiring company’s application its pre-existing policies to the employees of the acquired company. According to a pleading in this case, the companies ran background checks on thousands of employees acquired in the acquisition without first obtaining authorizations. One can guess that the acquiring companies thought that the employees’ files would have everything needed to run a new background check.

In the resulting settlement, class members received a total of $1.2 million for the first claim and $2.1 million for the second claim. To collect these amounts, they did not have to show that any adverse action was taken or that the reports were inaccurate. These were simply claims of a technical failure to have the right documentation.

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