You may already know that you have certain rights on the job to be free from unlawful discrimination, to be paid minimum wage and overtime if you work in an eligible position, and to receive medical and family leave. But you may not know that you have certain rights even before you accept a job. Finding a job be challenging, but legislatures around the country are working to make it a little fairer for millions of Americans looking for work.

Fair Credit Reporting Act

The Fair Credit Reporting Act is a federal law that lays out the rules that employers must follow when running background checks, usually criminal and credit checks. Employers must:

  1. tell people applying for jobs that they may use backgrounds check to make hiring decisions,
  2. notify people of this information in writing, on a document separate from all other application materials, and
  3. secure written permission before running the background check.

If an employer runs a background check and, based on that information, takes “adverse action” against an individual (usually terminating or declining to hire), the employer has additional responsibilities. The company must:

  1. give notice of the report they used in making their decision plus a summary of the individual’s rights under the Fair Credit Reporting Act,
  2. inform the employee that the company that generated the report did not make the decision and cannot give reasons for the adverse action taken by the employer, and
  3. notify the employee that they may dispute the accuracy of the report and receive a free report within 60 days.

Companies that run background checks also must act according to certain rules. They must verify who is asking for background checks, confirm that the reports are used for valid purposes and ensure that information is accurate. Most information contained in a background check which does not pertain to criminal convictions cannot be more than seven years old. Individual states often have even stricter laws that companies must follow.

Employers and other companies that use background checks are being forced to take the requirements of the Fair Credit Reporting Act seriously as more and more people file lawsuits for mishandling of background check information that violates the law.

  • Home Depot: In 2016, a court approved a $3.4 million settlement for an FCRA action against Home Depot. Plaintiff claimed that the company used improper forms to disclose employment background checks which contained additional information, in violation of the FCRA.
  • Wells Fargo: In 2015, Wells Fargo settled an FCRA class action for $12 million. The plaintiff claimed that he applied for a job at Wells Fargo and that, when he was rejected for the job, Wells Fargo failed to provide the results of the background check or other materials required by the law. The parties settled on behalf of two classes: people who applied for a job and received a specific disclosure form, and people who did not receive the required report after Wells Fargo took adverse employment actions against them.
  • JP Morgan Chase: In 2015, JP Morgan Chase settled an FCRA class action for $8.75 million. Specifically, the Plaintiff claimed that JP Morgan ran annual credit checks on customers even after customers no longer had accounts at JP Morgan
  • Food Lion: In 2015 the parent company of this grocery store chain settled an FCRA class action for almost $3 million. The plaintiff claimed that when she applied for a job at Food Lion, she did not receive proper notification either that the company was going to run a background check or that they declined to hire her based on certain inaccurate information contained in the background report.
  • Publix: In 2014 Publix settled an FCRA class action for $6.8 million for failing to provide proper disclosures regarding pre-employment background checks.

If you believe that an employer has failed to properly disclose background checks as part of your job application process, or if you have been rejected for the job without receiving the legally required notices, it is important that you reach out to an attorney to discuss your options. Pelton Graham LLC has extensive experience with state and federal employment laws.

For more information on the Fair Credit Reporting Act, visit the Equal Employment Opportunity website.

Ban the Box/Fair Chance to Work

The “Ban the Box” and “Fair Chance to Work” movements are gaining strength throughout the country as more and more companies and governments recognize that extending employment opportunities to persons with criminal records is one of the best ways to reduce recidivism and boost the economy. Nearly one in three adults in this country has a criminal history that can show up in an employment background check and destroy a person’s job prospects before an employer ever meets with them.

Around the country, more and more cities and states are passing “Ban the Box” and “Fair Chance to Work” laws, which require employers to consider job applications before asking about criminal conviction records. “Ban the box” laws require companies to remove questions (often a check box) regarding criminal history from job applications. If an applicant does possess a criminal record, companies may be required to evaluate whether there is any connection between the conviction and the job instead of simply denying to hire an applicant on the basis of a criminal history.

“Fair Chance to Work” laws go further to prohibit employers from asking about a potential employee’s criminal conviction record until after making a conditional job offer and may ban employers from inquiring into other criminal records, such as arrests. These laws force employers to consider job applicants in a holistic manner, taking criminal convictions into account only after evaluating other relevant factors.

More and more large retailers are voluntarily taking action to “ban the box” from job applications. Federal, state and local agencies are debating and implementing measures to delay inquiring into criminal history until a later point in the application process for many positions.

In 2016 the New York Attorney General reached major settlements with Big Lots and Marshalls regarding their failure to remove criminal history questions from their job applications in violation of a city “ban the box” law. Many states and cities are still in the early phases of debating, adopting and enforcing “ban the box” and fair chance to work laws. In New York City, individuals who have suffered a violation of the city’s Fair Chance to Work Act may either file a claim with the city Commission on Human Rights or file a lawsuit.

For more information on the Ban the Box and Fair Chance to Work campaigns around the county, visit the National Employment Law Project website.

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