What Can I Do If I Lost A Job Due To A Background Check?

 If your employer or potential employer is going to run a credit check, then they must comply with the Fair Credit Reporting Act. This requirement covers anything the employer is getting from a consumer reporting agency that covers personal and credit characteristics, character, general reputation, or lifestyle, but not the HR department running your name on Google, checking out your Facebook page, or reading your blog. So it depends on who did the background check.

If they are going to run a background check that is considered to be a credit check, and they are hiring an outside agency to do it, they have to give you a document solely for the purpose of telling you they intend to conduct a credit check. It was possibly shoved in with a stack of papers they handed you with your application or pre-employment forms. They need your permission in writing.

They must also tell you if they’re about to deny a job, reassign, or terminate you because of what was disclosed in a credit report. They must give you written notice with a copy of your credit report and a document called "A Summary of Your Rights Under the Fair Credit Reporting Act.”

Once the employer decides to use the report against you, they must then give another notice, this time telling you the name of the agency that did the credit report, saying the agency isn’t the one that made the adverse decision, and telling you how to dispute the information in the report with the agency. This notice can be verbal or in writing, unless you’re a trucker, in which case it must be written.

If an employer runs your credit history though a third party agency without permission, they’ve broken the law. 

But let's say they run the background check themselves. They check your social media and find out, for instance, your race, that you have a disability, that you have a family history of a genetic disease, or that you're pregnant. They aren't allowed to turn you down for a job or fire you on that basis. That's illegal discrimination, and you might have a discrimination case.

If they find an arrest or conviction record, then there are some states that don't allow them to use this against you. Florida is not one of those states. EEOC has taken the position that a blanket refusal to hire based on criminal records can be discrimination, but I haven't seen any cases supporting such a claim. If you are, for instance, male and a female with the same record is not excluded but you are, that could certainly be a discrimination claim.

If they find out you sued a prior employer for discrimination and refuse to hire you on that basis, that could be illegal retaliation and you might have a claim for violation of anti-discrimination laws.

If you think any of this applies, contact an employee-side employment lawyer in your state for advice on how to proceed.

Guest Post: Why Employers Want To Check Your Background

Donna's note: I sometimes write here about how employers break the law conducting background checks and why hiring practices that exclude arrests/criminal records may be discriminatory. I thought it would be interesting to hear the perspective on why employers want background checks and what they're looking for. Here's what a background check expert has to say on the topic.

By Rebecca Gray

Due to a highly competitive market, finding a great job posting or even landing an interview doesn't necessarily mean you've got it made. Another applicant with matching skills could win that coveted spot based on how they conducted themselves years before. Background checks have become common fare for companies of all sizes—and though the extent each potential employer delves into your private business may vary, there's a very good chance they'll be looking.

In order to be prepared it's important to understand what companies are looking for, and why. But first, know your rights; for potential employers to be able to seek out extensive personal information they must first have written consent from you. Do you have the right to decline? Sure. Will you get the job if you do so? Probably not.

Why Companies Do Background Checks

It's an employer's market. Depending on the specific job you seek, there could be hundreds or even thousands of applicants to weed through. Human resource search filters can sift through the most basic requirements, yet the more promising candidates could have very similar skills and education levels. Background checks are a great way for companies to make discerning choices. 

  

Fact or Fiction? Embellishing your qualifications or history on a resume is never a good idea. When companies take even a cursory glance at the “facts” and find fiction, they will quickly move on to other applicants. If you are well-suited for the job (at least on paper) then you may be subject to a more extensive background check before the interview, or after. 

What Are Companies Looking For?

Each organization has its own set of priorities, ethos, etc. But on the whole, most are looking at key aspects such as:

• Legal Standing: Prior arrests might not prevent you from being hired, yet employers will most certainly take note of past legal issues such as DUI's, workplace litigations, stealing, anger management issues, and more. Note that juvenile records are not accessible, yet adult records are. The extent that companies can search for felony and misdemeanor issues can vary from state to state. In addition, prior driving offenses usually prevent applicants from being able to obtain special licenses and permits.
• Fiscal Responsibility is another topic of interest to most companies. A standard search will most likely include credit history and loan defaults. A prior bankruptcy will not necessarily prevent a company from hiring you but it could be the one negative component giving another candidate that leading edge. Employers also need to be able to trust that new employees will be able to care for work funds and budgets in a responsible manner.
• Drug Testing is another common component of workplace background checks, though consenting to take one is usually done via a separate form. In addition to pre-hire testing, many companies also reserve the right to test at random intervals and also if an employee is injured on the job. Testing is set up through the prospective employer and normally paid for by the company, as well.
• Specialized concerns will most likely vary, depending on the company. For instance, any educational institutions or childcare facilities will take particular note of any child abuse allegations. And companies offering expense accounts will doubtless look at an applicant's credit history quite closely.

What Are Your Rights?

Background checks are especially frightening to anyone who's had trouble in the past. However, time can help lessen the damage of past mistakes. For instance, collection notices and civil arrest records are not reported after 7 years. Bankruptcies are not reported after 10 years. But according to Privacy Rights, high-paying jobs with salaries higher than $75,000 a year will draw higher scrutiny of applicants. 

Though background checks can feel incredibly invasive and daunting, they are sensible tools to help employers hire wisely. Remember that most credit and legal problems can be wiped clean in time, yet such missteps can be problematic as you seek employment. 

Author Byline:

This guest post is contributed by Rebecca Gray, who writes for background check. She welcomes your comments at her email id: GrayRebecca14@gmail.com.

Will The Reason For My Termination Turn Up In A Background Check?

A reader left this question in the comments to my post Loss Prevention is Lying to You.

Hey Donna, would you know if for example LP fired a person from a company, would other companies that person applies for be able to see everything that happened between him and the company he got fired from?

One of the very common statements I hear is, "I know they aren't allowed to say that in a reference." This statement usually comes from someone who is shocked (shocked!) to find out that their former employer gave them a very bad reference. Many people think employers can only give out dates of employment and job titles.

That's dead wrong. At least here in Florida, an employer can say pretty much any darned thing they want in a reference. There's a statute saying that employers can't be sued for giving truthful information in a reference here and in many other states.

What does that mean? It means that employers can trash you at will and may not be breaking the law. Here's what you need to know:

Employers can't defame you. That means they can't give out factually false information to potential employers. While they can probably get away with saying stuff like, "She wasn't a good fit," or "He didn't get along with management," or "Her performance wasn't up to par," they can't say, "He turned out to be a pedophile," or "She embezzled from us." Opinion is okay but false facts aren't. And no, they can't say, "In my opinion, she embezzled from us," and get away with it if that's false.

Truth is always a defense. Saying, "A coworker complained about sexual harassment and we had to let her go," if true, may not cross a line even if you didn't sexually harass anyone, but this is probably borderline and would depend on the situation.

Retaliation may (or may not) be illegal. Sometimes, employees say to me, but I know they're retaliating. I have to ask: "Retaliating for what?" Some people don't seem to understand the concept. Others think if they complain about bullying, unprofessionalism, or bad boss behavior they're protected. They aren't. However, if you report or object to something illegal like discrimination, failure to pay wages, safety violations, FMLA violations, or sexual harassment, then you're probably legally protected against retaliation. This means an employer can't slam you in references just to get back at you for, say, filing with EEOC.

Public records: Generally, your personnel file or loss prevention file isn't a public record, and your former employer isn't going to part with it or give a copy to a potential employer. Exceptions exist for many government entities that have to make records available to the public. Also, some publicly held corporations may have to disclose certain information to shareholders. In addition to this, if you're applying for a job in law enforcement, many times the police department will investigate by asking for a copy of your personnel file for review (and most employers will cooperate).

Legal proceedings: EEOC filings aren't public record, but lawsuits are. If you sued your former employer and your personnel file or testimony came in about your termination, then your new employer or a potential employer can get this by pulling the court file.

Industry filings: Some industries, like securities, have filings that include reason for termination. Those forms, once filed, can be pulled by potential employers in the industry.

These are all reasons why, if I'm negotiating a severance package or settlement of an employment law case, I ask for either an agreement the employer won't say negative things about you to anyone, or at least for neutral references, which means they can give dates of employment and job title only. If you left on bad terms, you might want to talk to an employment lawyer about getting an agreement that our former employer won't say bad things about you.

Some employers have a policy of only giving out neutral references, but if they violate their own policy you don't necessarily have a lawsuit against them for doing so. Many potential employers will ignore your request that they call a central reference number or HR and will call your former supervisor directly, in which case almost anything could happen.

Donna's Employment Law Predictions for 2014

Last week I revealed how I did on my predictions for 2013 (pretty darned good, if I do say so myself). Today, I look into my crystal ball for 2014. Here's what I see on the horizon:

1. Minimum Wage: Raising the minimum wage will be a hot political issue in 2014. We saw some movements in 2013 to make significant increases, and that will continue. Unless something drastic happens in the midterm elections, it's doubtful we'll see anything significant on the national level, but look for more states to increase the minimum wage to the $ 9 - 10 range. Some may go even higher, like Seattle's move toward $15. Raising the minimum wage is great for the economy. Unlike trickle-down economics, it gets money circulating quickly. Henry Ford had the right idea: pay your employees enough so they can buy your products.
2. Legalize It: Legalized marijuana will spread to more states, creating some confusion for employers. Can they fire employees who test positive, like Colorado? Or will their state prohibit firings for legal marijuana use like Connecticut, Arizona, Rhode Island, Maine, Colorado and New York? Colorado has a law, as do other states, prohibiting firing/discrimination for legal off-duty activities, so watch for some litigation over this issue there. Look for marijuana growers and sellers to push for laws like tobacco users have in several states protecting them from discrimination at work. In the meantime, medical marijuana users will seek protection under the ADA and other disability discrimination laws.
3. Health Care: ObamaCare kicked in and it will change the way we look at health insurance. Sure, it isn't ideal. But when a million or so people who've never had health insurance or who haven't had it in years suddenly can get medical treatment, they'll start to expect to be treated like human beings instead of human waste. From here, we'll be very close to an upheaval in the way we deal with health insurance. This year, we'll see some confusion as the regulations kick in, some stupid employers dumping insurance and cutting people to part-time to avoid paying insurance, but the employer mandates have been delayed until 2015, so most of the stupid employer activity will be at the end of the year and into next year. I say that employers who do this are stupid because they'll ultimately lose good employees. With more people covered, there will be more health care jobs available.
4. Internships Cut: With employers under attack for unpaid internship programs that don't actually educate the interns and replace regular employees, some programs will simply disappear. That's not all bad, since the interns-as-slaves programs need to die. We'll see better internship programs cropping up, ones that are truly educational, or paid internships. But most of the new programs will start up after this year. This will be a year of lost programs. We'll also see some attempts to put interns under the protection of discrimination and sexual harassment laws. Some may succeed on the state or local levels, but there's no way that happens on a national level with Congress as it is currently configured.
5. Failed Again: Attempts to pass anti-bullying laws and the Civil Rights Tax Fairness Act will fail just like they do every year.
6. NLRB and EEOC Cut Off By Courts: NLRB and EEOC will continue to try to expand the protections employees have. Courts will continue to stop them. Still, they'll inch forward with some new progress for employees. Baby steps.
7. Lip Service: While the midterm elections kick in, we'll hear lots of big proposals to help employees. Little or nothing will pass due to gridlock. Failures will include the FAMILY Act, Arbitration Fairness Act, and ENDA. However, the fact that each of these bills will be blocked will become fodder to take down some of the more anti-employee members of Congress. Maybe 2015 will see some progress.
8. Background Checks: EEOC's efforts to demonstrate that criminal background checks have a disparate impact on blacks have been pretty well crushed so far. However, there will continue to be efforts to ban credit checks. More states will ban or limit use of credit information in hiring. The federal efforts to do so will fail. More states will pass ban-the-box laws barring many inquiries about arrest and conviction records in job applications. There is zero chance such a law will pass on the federal level this election year.
9. Pregnancy Discrimination: The issue of whether pregnancy is covered under the Florida Civil Rights Act will be resolved one way or the other by the end of the year. I think the Florida Supreme Court will say it is already covered. If not, then the legislature will pass a fix. The difference will be for all those women caught in between. If the Court doesn't rule for employees, lots of new moms who thought they were covered and sued under state law will be out of luck. Rule wisely, Supremes.
10. LGBT Protections: States and local governments will continue to pass discrimination laws banning LGBT discrimination. The feds will fail again, but EEOC will continue to push for application of existing law to LGBT employees.
11. Religious Discrimination: Religious employees will push the limits on their ability to proselytize and pray at work. There will be a disconnect between the right to practice religion vs. the right not to be harassed for not sharing a religion and also LGBT rights. Look for right-wing religious groups to push the argument that religious discrimination laws allow them to speak out against gay rights in the workplace. In an election year, we'll see extreme positions pushed on both sides.

Well, that's it for my predictions. I think this year will be one where employees start to wake up to how few rights they have and start to push for more. Major change will come only with a change in Congress.

Call Me Prescient: How My 2013 Employment Law Predictions Fared

If you are a regular reader, you'll recall that I made predictions at the beginning of 2013 about what I thought we could expect. How did I do? Call me Cassandra.

Here's what I said would happen, and what really did:

1. Even More Active NLRB: Look for stepped up activity against employers on social media restrictions, attempts to suppress worker concerted activities and lopsided agreements. NLRB will do what other government agencies have punted on: help employees.

Sure enough, NLRB didn't disappoint. They were up to full strength by the middle of  the year. They continued to press for employee rights in non-union workplaces. They struck down some overbroad social media policies and policies on confidentiality of investigations. They rolled out an app to inform employees in union and non-union workplaces about their rights. It wasn't all pro-employee. NLRB upheld several Facebook firings. See also here and here for some of 2013's social media cases.

2. EEOC Will Start Stepping Up Not to be outdone by NLRB, EEOC will become more active as well. This year saw the beginnings of activity to address gay rights and retaliatory confidentiality agreements. Look for more activity that actually helps employees, and for an agency that no longer accepts employer position statements as gospel.

EEOC tried to step up with the issuance of a guidance and then a clarification to its guidance on criminal background checks, but was repeatedly shot down in the courts. Let's hope they don't give up on this important issue, which definitely has a disparate impact on minorities. EEOC also stepped up its enforcement of Title VII regarding LGBT employees under the theory of "sexual stereotyping." They also cracked down on overbroad agreements that limit employees' ability to file with EEOC. I still see a tendency to accept employer position statements as gospel, at least here in Florida, but there's definite progress. Baby steps.

3. Marijuana Litigation With flat-out legalization in two states and legal medical marijuana in many more, we’ll start to see litigation on the employment-protection provisions built into many of these new state statutes. The fact that it’s still illegal under federal law will make things complicated. Will the feds finally give up and recognize state’s rights? Probably not this year, but definitely within the next 5 years.

Sure enough, the litigation has begun. See also here and here. Still nothing on the federal front to recognize states' rights, but it's only a matter of time.

4. Gay Rights Expansion Speaking of states’ rights, with gay marriage spreading across the country, the feds can’t be far behind. We probably won’t see Congress adding sexual orientation to Title VII or gay spouses to FMLA this year, but I think it’s going to happen this Presidential term.

Wow! What a year for gay rights. The Defense of Marriage Act was stricken down, which led to the Feds deciding that FMLA and EBSA do protect gay couples in states that legalized gay marriage. While there was no legislation passed to amend Title VII or FMLA, ENDA did pass the Senate (although it is stalled indefinitely in the House).

5. Strikes All of a sudden, workers are waking up. They’ve realized they don’t have to put up with crappy working conditions in silence. We’ll see more non-unionized workforces going on strike. We’ll also see some Wal-Mart and fast food corporations retaliating for the strikes that have happened last year and which will continue in 2013. Fortunately, I think NLRB will take action to slap employers for illegal retaliation.

2013 saw more fast food strikes and Wal-Mart strikes.  As predicted, Wal-Mart retaliated and NLRB slapped them.

6. Federal Courts Become (Slightly) Less Anti-Employee While federal courts have long been a sad place for employees, especially here in the 11th Circuit, some recent cases indicate that the times may be changing. Look for some rulings in favor of employees for a change. All it will take is a couple of Supreme Court appointments over the next four years and it will be a different world for employees. This year, the Supremes will, for the most part, continue to bend toward corporate interests instead of the working people.

There were some baby steps toward becoming more pro-employee in the federal courts. The usually very pro-employer 11th Circuit sided with the NLRB in a recess appointment case.  Several federal courts found that sex discrimination includes sex stereotyping, providing protection for LGBT employees. Some other pro-employee decisions here and here. Still, the Supremes came in overwhelmingly pro-employer this year. Overall, the federal courts remain a relatively unfriendly place for employees in many circuits.

7. Arbitration Under Fire Although arbitration clauses have been the darling of employers, who are sneaking them into applications, handbooks and that giant stack of papers employees sign on their first day, look for some attacks this year coming from government agencies. Watch for NLRB, EEOC, FTC and maybe even DOJ to subject arbitration agreements to extra scrutiny. It’s doubtful Congress will take action this year, but if they do something to help consumers, employees will probably be able to benefit.

Some courts have tossed one-sided pro-employer arbitration agreements. However, the Supremes upheld class action waivers in arbitration agreements. The NLRB lost when it attempted to invalidate an arbitration agreement. Meanwhile, FTC is challenging a consumer arbitration clause. No legislation passed to help consumers or employees this year.

8. Bullies Will Slide Although states periodically consider anti-bullying laws, they always fail to pass. It’s likely 2013 will be no different. Watch for more consciousness-raising but no legal action this year.

Still no anti-bullying laws passed in 2013. Sigh.

9. Privacy Protections More state legislatures will pass laws against demanding employee social media passwords and other egregious employer snooping. Congress might even do something to stop some of the worse invasions of privacy, but I won’t hold my breath. They’re too busy with gridlock to actually do anything that might protect their constituents.

Arkansas, Colorado, Illinois, Nevada, New Jersey, New Mexico, Oregon, Utah, Vermont and Washington passed laws against demanding social media passwords, with at least 36 states trying to follow suit.

10. Background Check Restrictions More states will place limitations on background checks and what background information employers can use against applicants. Watch for laws limiting use of criminal records, unemployment, and credit history against applicants. EEOC will continue looking for disparate impact of background check information against women and minorities. It’s only a matter of time, say 2013 or 2014, before we see a case arguing that use of criminal records has a disparate impact on men, but it won’t come from EEOC.

10 states and almost 60 local governments have passed "ban the box" legislation prohibiting or limiting the use of criminal background checks. Some major employers also announced they'd end the practice. There was one unsuccessful case arguing that criminal background checks had a disparate impact on men. It didn't come from EEOC. As I discussed in 2 above, EEOC lost a number of criminal background cases this year based on racial impact. It is no surprise that it didn't try to expand the theory to include sex discrimination.

Overall, 2013 was a mixed bag for employees. Better than some years, and we definitely saw some activity to protect employees. The biggest surprise was the passage of some minimum wage increases, with 13 states raising the minimum wage.

Stay tuned for my predictions for 2014.

Your Rights Regarding Pre-employment Credit Checks

Nevada has just joined the ranks of 9 other states that have outlawed the use of credit history to discriminate against potential employees. However, they're still a minority. Still, there’s a clear trend in the states. According to the National Conference of State Legislators, “42 bills in 24 states and the District of Columbia have been introduced or are pending in the 2013 legislative session relating to the use the credit information in employment decisions. Out of the total 42 bills, 39 address restrictions on the use of credit information in employment decisions.”

In most states, pre-employment credit checks are legal. Employers argue that bad credit are an indication that the person may embezzle or be dishonest. I say nonsense. People with good credit embezzle all the time. People with bad credit may have just had a run of bad luck, a nasty divorce, uninsured medical bills, or some other unavoidable financial disaster. Being poor is not the same as being dishonest.

The recession brought this issue to a head. Suddenly 10% of the population was unemployed. People with stellar credit found themselves in trouble. While government tends not to pay attention to issues affecting the poor, when it hits the middle class, suddenly everyone cares.

There have been multiple attempts to address this situation in Congress. All have failed. In my opinion the current Congress won’t do anything until the problem starts to impact the upper class. We have a very anti-employee majority in office. The only way things will change is if voters speak up and tell their representatives to make employers butt out of their finances.

So, what do you do if you're in the unlucky majority of states that still allow this invasion of your privacy?

I suggest honesty. If you have bad credit, be ready to explain your situation. Tell the interviewer your plan to address the situation. While being “in over your head” may be considered an indicator of potential dishonesty, it doesn’t mean you’re going to become an embezzler. If you can demonstrate that you have a plan to get out from under the debt, the HR department might feel reassured.

What are your rights if an employer runs your credit history?

If your potential employer is going to run a credit check, then they must comply with the Fair Credit Reporting Act. This requirement covers anything the employer is getting from a consumer reporting agency that covers personal and credit characteristics, character, general reputation, or lifestyle, but not the HR department running your name on Google, checking out your Facebook page, or reading your blog.

If they are going to run a credit check, they have to give you a document solely for the purpose of telling you they intend to conduct a credit check. It was probably shoved in with a stack of papers they handed you with your application or pre-employment forms. They need your permission in writing.

They must also tell you if they’re about to deny a job, reassign, or terminate you because of what was disclosed in a credit report. They must give you written notice with a copy of your credit report and a document called "A Summary of Your Rights Under the Fair Credit Reporting Act.” This process does not apply to truckers.

Once the employer decides to use the report against you, they must then give another notice, this time telling you the name of the agency that did the credit report, saying the agency isn’t the one that made the adverse decision, and telling you how to dispute the information in the report with the agency. This notice can be verbal or in writing, unless you’re a trucker, in which case it must be written.

If an employer runs your credit history without permission, they’ve broken the law. If they don’t jump through all the hoops required under the Fair Credit Reporting Act, you have potential claims against them. In that case, contact an employment lawyer in your state to discuss your options.

The EEOC views the use of employment credit checks as potentially discriminatory against women and minorities. If you’ve been denied a job or had other adverse action taken against you by an employer based on bad credit, you might want to explore the possibility that you have a discrimination claim with an employee-side employment lawyer in your state..