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Jonathan A. Segal
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As we all know, if an employer uses a third party to conduct criminal background checks for it, the Fair Credit Reporting Act (FCRA) applies. Generally speaking, there are three (3) steps mandated by the FCRA in terms of the communications between the employer and the applicant or employee:  (a) prior written authorization; (b) pre-adverse action notice; and (c) adverse action notice. Effective January 1, 2013, there are new  forms that must be used as part of the process.  In particular, an updated “A Summary of Your Rights Under the Fair Credit Reporting Act,” must be given to applicants and employees as part of pre-adverse action notice (with regard to criminal or other records).

In the case of investigative consumer reports, which include personal interviews as opposed to relying solely on documents of record, the revised notice must be given as part of the first step, too.

For a copy of the new form, paste and see Appendix K: http://bit.ly/Rv6XqS

In this regard, it is important to note that the FCRA no longer is enforced by the Federal Trade Commission (FTC).  Rather, it is enforced by the Consumer Financial Protection Bureau (CFPB).  The CFPB assumed enforcement and rule making authority from the FTC under the Dodd-Frank Wall Street Reform and Consumer Protection Act. As employers update their forms to comply with the FCRA, now is also a good time to update their forms to take into account the EEOC’s guidance on criminal records. See http://www.eeoc.gov/laws/guidance/arrest_conviction

Generally, the EEOC requires that employers make individualized assessments, using the Green factors:  (a) nature of job; (b) nature of conviction(s); and (c) time frame since conviction. Green refers to the seminal appellate court decision in this area. As part of recommended individualized assessment, the EEOC encourages employers to do more than consider the Green factors.

The EEOC has stated that the  individualized assessment also requires “that an employer informs the individual that he [or she] may be excluded because of past criminal conduct; provides an opportunity to the individual to demonstrate that the exclusion does not properly apply to him [or her]; and considers whether the individual’s additional information shows that the policy as applied is not job related and consistent with business necessity.” The FCRA requires only that employers notify applicants and employees of the conviction record which would be disqualifying and provide them with an opportunity to correct any mistakes.

The individualized assessment inquiry is a due process right that gives the applicant or employee an opportunity to provide potentially “mitigating” factors for the employer to consider, even assuming the conviction record is correct. This very small change can make employer decision-making more defensible before the EEOC. It also is consistent with general notions of fundamental fairness.

It should be noted that the EEOC recognizes that there can be “targeted exclusions” such that an individualized assessment is not necessary.  That is where there is tight nexus between the 3 Green factors.  More detail on targeted exclusions can be found in guidance referenced above.

Don’t forget state and local laws, too.  For example, Newark has become the most recent jurisdiction to “ban the box.”

For now, however, let’s keep it easy.  Update your forms to comply with the FCRA and consider including an inquiry as part of your pre-adverse action notice consistent with the EEOC’s preference for individualized assessments.

THIS BLOG SHOULD NOT BE CONSTRUED AS LEGAL ADVICE, AS PERTAINING TO SPECIFIC FACTUAL SITUATION OR AS ESTABLISHING AN ATTORNEY-CLIENT RELATIONSHIP.

About Jonathan A. Segal
471
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Jonathan A. Segal is a partner at Duane Morris LLP in the Employment Group. He is also the managing principal of the Duane Morris Institute. The Duane Morris Institute provides training for human resource professionals, in-house counsel, and other leaders at client sites and by way of webinar on myriad employment, leadership labor, benefits and immigration topics. Jonathan has served intermittently as a consultant to the Federal Judicial Center in Washington, D.C. for more than 20 years, providing training on employment issues to federal judges around the country. Jonathan also has provided training on harassment on behalf of the EEOC as well as providing training on diversity to members of the United States intelligence agencies. Jonathan is also frequently a featured speaker at national, state and local human resource, business and legal conferences, including conferences sponsored by the Society for Human Resource Management and the Pennsylvania State Chamber of Business and Industry. Jonathan’s practice focuses on maximizing compliance and minimizing legal risk. Jonathan’s particular areas of emphasis include: equal employment opportunity in general and gender equality in particular: social media; wage and hour; performance management; talent acquisition; harassment prevention and correction; and non-competes and other ways to protect your business. You can find him on Twitter @Jonathan_HR_Law .
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Jonathan A. Segal
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My most recent blog as published by SHRM’s We Know Next: http://www.weknownext.com/blog/employment-predictions-for-2013-from-the-guy-who-predicted-a-bull-market-in

This blog should not be construed as legal advice, as pertaining to specific factual circumstances or as establishing an attorney-client relationship.

About Jonathan A. Segal
469
author_image
Jonathan A. Segal is a partner at Duane Morris LLP in the Employment Group. He is also the managing principal of the Duane Morris Institute. The Duane Morris Institute provides training for human resource professionals, in-house counsel, and other leaders at client sites and by way of webinar on myriad employment, leadership labor, benefits and immigration topics. Jonathan has served intermittently as a consultant to the Federal Judicial Center in Washington, D.C. for more than 20 years, providing training on employment issues to federal judges around the country. Jonathan also has provided training on harassment on behalf of the EEOC as well as providing training on diversity to members of the United States intelligence agencies. Jonathan is also frequently a featured speaker at national, state and local human resource, business and legal conferences, including conferences sponsored by the Society for Human Resource Management and the Pennsylvania State Chamber of Business and Industry. Jonathan’s practice focuses on maximizing compliance and minimizing legal risk. Jonathan’s particular areas of emphasis include: equal employment opportunity in general and gender equality in particular: social media; wage and hour; performance management; talent acquisition; harassment prevention and correction; and non-competes and other ways to protect your business. You can find him on Twitter @Jonathan_HR_Law .