Firm News

Background Check Case Receives Media Coverage


Apr 27, 2014

A recent Baillon Thome Jozwiak & Wanta LLP success was featured in both the Minneapolis Star Tribune newspaper and Channel 12 television news.  The case highlights a growing matter of concern: the increasing use of background checks by employers, and inaccurate or misleading information contained in criminal background reports used by employers to make employment hiring and firing decisions.

Baillon Thome attorney Daniel Leland represents the plaintiff, Mahlon Martin, in Martin v. First Advantage Background Services Corporation, 11-CV-033557, currently venued in United States District Court, District of Minnesota.  In that matter, the Plaintiff was an employee of Wells Fargo Bank.  After more than a year of employment, the Plaintiff underwent a criminal background report prepared by First Advantage Background Services Corp. (“First Advantage”).

The criminal background report prepared by First Advantage reported that the Plaintiff had been jailed for one year for a crime committed 14 years earlier.  As a result, Wells Fargo believed that it was prohibited by law as a federally insured banking institution from continuing to employ the Plaintiff, and terminated his employment. 

There was one simple problem: the Plaintiff did not serve one year in jail and the criminal charge had been vacated and dismissed.  The Plaintiff was not prohibited from employment with Wells Fargo.  In fact, the Federal Deposit Insurance Corporation issued a letter to the Plaintiff stating the very same.  Yet he lost his job and livelihood.

On March 26, 2014, the United States District Court ruled that the Plaintiff was able to proceed to trial on two separate issues: for the inaccuracy in the background report, and because First Advantage failed to correct its records after the Plaintiff notified the company of its error.  Trial in this matter is slated for July 2014.

The legal issues presented in the case are novel as Plaintiff’s claims are brought under a little known, and rarely cited statute, the Minnesota Business Screening Services Act (“MBSSA”), Minnesota Statutes § 332.70.  While the Court held that the Plaintiff could not proceed on claims for the inaccurate information under the federal Fair Credit Report Act (“FCRA”), it found that the Plaintiff could proceed under the MBSSA, a Minnesota state statute.  In addition to the inaccurate information contained on the Plaintiff’s criminal background report, the Plaintiff has sued because First Advantage failed to correct or modify its report after being advised of its error.  First Advantage’s failure to correct the background report after its accuracy was disputed will proceed to trial under both the MBSSA and the FCRA.

While the legal issues presented in Martin v. First Advantage are novel, unfortunately, mistakes and errors in criminal background screening reports are not.   In 2012, the National Consumer Law Center (“NCLC”) published a report detailing errors and mistakes in the billion dollar a year background reporting industry.  The report, Broken Records: How Errors by Criminal Background Checking Companies Harm Workers and Businesses, describes the numerous number of ways in which background screening companies make mistakes that affect individuals’ ability to find and keep employment, including:

·      Mismatching the subject of the report with another person;

·      Reporting sealed or expunged information;

·      Omitting information about how the case was disposed or resolved;

·      Containing misleading information; and

·      Mischaracterizing the seriousness of the offense reported.

The full report, and supplemental materials can be found here (last visited April 22, 2014).

While the NCLC report details many of the obstacles—and lack of remedies—to individuals harmed by inaccurate, misleading, and erroneous criminal background reports, the Martin v. First Advantage Background Services Corp. case illustrates that background reporting companies can be held accountable for their errors.  The Martin case is unique in that Minnesota state law provides a remedy to injured individuals in certain situations where federal law may not.

According to Leland, “The Martin decision is very significant.  First Advantage argued in two motions, and in hundreds of pages of filings before the Court, that it should not be legally responsible for its errors which cost my client his job.  The Court’s decision shows that even if loopholes exist in the current federal law that can be exploited by background check companies to avoid liability, they can be held accountable under state law.”

The issues raised in this lawsuit are timely.  According to a 2010 survey by the Society for Human Resources Management approximately 93% of employers conduct criminal background checks on some applicants, while 73% of employers conduct checks on all applicants.  Despite the pervasiveness of the practice, as detailed by the NCLC report, errors and misleading information in criminal background reports are not uncommon, causing individuals to lose their jobs and livelihood. 

Currently, Minnesota state lawmakers are considering legislation that would revise court regulations on expunging records, including criminal histories. This legislation along with others, such as “Ban the Box,” which Governor Mark Dayton signed into law last May, are seen by many as ways to give reformed offenders a second chance to successfully reintegrate into and fully participate in society.  While these legislative steps are important, they currently do not address the very harm at issue in the Martin case: inaccurate criminal background reports.  At this time, errors in background reports are primarily left to redress by private litigants.

Baillon Thome attorneys are experiences in handling cases involving inaccurate background information - contact one of our employment attorneys if you have been injured by improper handling of your private information.