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What are the pitfalls of conducting background investigations on job applicants?

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in Employment Background Check,Human Resources

Q. We use an outside company to conduct criminal background checks on applicants. The company asked us if we were interested in having it conduct searches on applicants’ past civil claims. Is that something we should do?

A. Be careful! You could learn lots of information that is irrelevant to the hiring decision and, worse yet, could subject you to litigation. Information regarding a past divorce could result in a marital-status discrimination claim. Learning about a past race discrimination lawsuit could lead to a race bias or retaliation lawsuit. Gathering information about past workers’ compensation claims could trigger a disability discrimination lawsuit.

Those are just a few of many examples of the risks of gathering such information.  

While there is risk, there are reasons why a more thorough background investigation might be useful. Certain types of employment misconduct and other misdeeds may very well be relevant to your hiring decisions. Much of this information would never be revealed by a criminal record search.  

If you decide that there are benefits to obtaining additional information beyond criminal conviction history, take steps to minimize the risk that an applicant who is turned down for employment may claim that the decision was for unlawful reasons.

It’s critical to insulate the people who make hiring decisions from access to prohibited information.

Direct your background check agency to withhold any information relating to an applicant’s protected class status. In particular, it should not provide any information regarding divorce proceedings, workers’ compensation claims or claims relating to alleged discrimination, har­­ass­­ment, retaliation of other employment-related matter.

The person “in-house” who initially receives this information should not be involved in making the hiring decision. That person should review the reports and make sure that those who make the hiring decision never have access to inappropriate information that has been in­­advertently disclosed. Document this process carefully in a way that would provide proof that the documentation was not reviewed when making the hiring decision.

Background investigations by an outside entity are regulated by the Fair Credit Re­­port­­ing Act. The law applies to all types of background checks, including criminal and civil court filings. Make sure your company is complying with its legal obligations under the law.

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