Employment Background Checks

Increasingly, employers are requiring job applicants and employees to submit to a background check, and, most often, a criminal background check. According to a 2012 survey by the Society for Human Resources Management, nearly 70% of employers conduct criminal background checks on all job applicants.

Criminal background reports can have far-reaching consequences for job applicants and employees. While studies vary, an estimated sixty-five million adults (nearly one in four) have some sort of criminal record. This large group of individuals may be denied employment, or even lose their job because of a criminal background report. However, there are some protections afforded to job applicants and employees regarding criminal background reports.

The Fair Credit Reporting Act

The main law governing criminal background reports is the Fair Credit Reporting Act (“FCRA”). Despite its somewhat misleading name, the FCRA applies to both credit reports and criminal background reports, and it covers employers and companies that create background reports.

When a company uses public record information for employment purposes—which is often the case regarding criminal records—the FCRA mandates strict procedures to ensure the information is accurate and up-to-date, particularly if that public record information is likely to have a negative effect on an individual’s ability to obtain employment.

Common Background Check Errors

Under the FCRA, background screening companies may be liable not only for inaccurate information, but also if the information is misleading in such a way and to such an extent that it can adversely affect employment decisions. Errors that can appear on a criminal background report can include:

  • Mismatching the subject of the report with another person;
  • Reporting sealed or expunged information;
  • Omitting information about how the case was disposed or resolved;
  • Mischaracterizing the seriousness of the offense reported (e.g. reporting a misdemeanor as a felony); and
  • Misreporting sentencing information.

Arrests and Charges

The FCRA also prohibits certain information from being reported by a background screening company. Importantly, a background report cannot include arrests or criminal charges that did not result in a conviction that predate the report by more than seven years. This is an important prohibition, as many arrests and criminal charges never result in a conviction. If a criminal background report reports a criminal charge that did not result in a conviction that is more than seven years old, they may be held legally responsible for reporting that information, and the negative consequences that result from that disclosure.

The FCRA allows an individual to bring a lawsuit against a background screening company if that company produces a criminal background report that includes false or misleading information, or if reports information prohibited from disclosure. While the remedies available are specific to each case, they can include compensatory damages, damages for lost wages, punitive damages, and penalties.

The Minnesota Business Screening Services Act

In addition to the FCRA, Minnesota state law includes a statute called the Minnesota Business Screening Services Act (“MBSSA”). Both the FCRA and the MBSSA allow individuals to dispute the accuracy of information contained on a background report. If someone does dispute the information contained in a criminal background report, a background screening company is required to conduct a reasonable investigation to determine if the disputed information is accurate and current. If a background screening company fails to conduct a reasonable investigation, it can be held responsible for its failure to do the same.

Know Your Rights – Request and Review Your Criminal Background Check Report

If an employer intends to take an “adverse action” against a current employee (e.g. firing, demoting, etc.) or (in most cases) refuses to hire an applicant because of information contained in a criminal background report there are certain requirements it must follow under the FCRA. The employer must provide employees or job applicants:

  • A copy of the report;
  • Notice of their rights, in a disclosure similar to the one that appears here.
  • Notice that an adverse action may be taken because of information contained in the report. The purpose of this provision is to allow employees and applicants time to review the report and to correct or explain any errors or misleading information. If an employer does take an adverse action based on a criminal background report, they must provide written notice of the same, in what is known as the “Final Adverse Action.”

Employees should review background reports prepared about them because they may contain false or misleading information. In Minnesota, employees and applicants have the right to request their criminal background report at the time they consent to having the report prepared.

Too often, individuals may not closely review their background reports and suffer an adverse employment action because of false or misleading information, or because information was reported that is prohibited from disclosure by law. As discussed above, non-convictions (i.e. arrests, criminal charges) are, in most instances, prohibited from being disclosed on a criminal background report if they occurred more than seven years before the date of the report. Certain petty misdemeanors may also be prohibited from being disclosed on a criminal background report if they occurred more than seven years prior to the date of the report.

Criminal Background Checks and the Equal Employment Opportunity Laws

The Minnesota Human Rights Act (“MHRA”) and Title VII of the Civil Rights Act of 1964, as amended (“Title VII”), prohibit employment practices that discriminate on the basis of a “protected status,” such as age, race, national origin, sex, etc. These laws prohibit not only practices stemming from animus toward a protected status (called “disparate treatment”), but also include neutral policies that disproportionately affect individuals of a certain protected status (called “disparate impact”).

According to guidance materials created by the Equal Employment Opportunity Commission (“EEOC”), national data supports a finding that criminal record exclusions have a disparate impact based on race and national origin. This data provides a basis for the EEOC to investigate violations of Title VII where it is alleged that criminal record exclusions have a disproportionate effect of excluding employees and applicants of certain racial and national origin groups. Normally, an employer will have to show that its process of excluding applicants or employees with certain criminal records is “job related and consistent with business necessity.” More information about criminal background checks and the equal employment opportunity laws can be found here.

Additionally, the MHRA prohibits an employer from requesting or requiring—before an applicant is hired—an applicant to provide information about the individual’s race, religion, national origin, public assistance, sex, color, marital status, sexual orientation, familial status, age, creed or disability. This prohibition may intersect with criminal background reports as employers may require applicants to provide information (such as date of birth) in connection with a pre-employment criminal background check. It is the Minnesota Department of Human Rights’ position that such an inquiry violates the MHRA. More information about the MDHR’s position on prohibited pre-employment practices can be found here.

Contact Our Minnesota Employment Lawyers to Discuss Your Rights
If you have been subject to a background check that contains false or misleading information, or information that is prohibited from disclosure under the FCRA, we want to hear from you. The employment lawyers at Baillon Thome Jozwiak & Wanta LLP are experienced in handling background check claims and will speak to you without charge for an initial consultation. To contact us, click here or call us at 612-252-3570.