Are You at Risk for a Lawsuit?

  • By Brittany Guyton
  • 20 Nov, 2015

If you’re an employer requiring background checks then the answer is likely, yes. Class action lawsuits against employers due to improper background screenings are increasing rapidly.


These cases generally fall under a law that controls the Fair Credit Reporting Act, and in most cases, can be easily avoided. Typically the alleged violations are minor technicalities. Employers usually conduct these screenings under a good faith belief that they are following the law. However, without competent legal counsel or other expert review of practices and policies, it is inevitable that violations will occur.


Damages can range from $100 to 1,000 per violation, even if the plaintiff is not harmed. Many employers have settled cases for millions of dollars despite believing they did nothing wrong!


To avoid potentially costly litigation employers should re-examine their background check disclosure forms to ensure compliance with the FCRA, the federal law that governs background checks for employment.


One of the easiest ways to prevent threats is to utilize a quality background screening firm that focuses on educating clients and provides accurate actionable information.


Contact Courthouse Concepts to ensure you’re in compliance with the FCRA: (479) 316-2606.


Top Reasons Why Employers Should Review Their Practices:


1.    Employer failed to obtain written authorization from the applicant before obtaining the consumer report.


The FCRA requires that the employer receive written consent from the       prospective employee before conducting a background screening


2.    Employer failed to provide a document consisting solely of the stand-alone disclosure.


The FCRA requires the employer to disclose to the applicant that a background screening may be obtained in a written disclosure and “in a document that consists solely of the disclosure.”


3.    The disclosure contained a release of liability.


Many cases argue that such a release violates the FCRA.


4.    Failure to provide the applicant with a copy of the consumer report and pre-adverse action notices before taking action.


Some cases involve allegations that employers have failed to provide the applicant with a copy of the consumer report, and summary of their rights under the FCRA.


5.    Failure to provide a post-adverse action notice.


The FCRA requires employers to provide the applicant with a post-adverse action notice after the employer takes adverse action to communicate several required notification components.


6.    Failure to update forms.


This is easily avoidable yet there have been many cases in which applicants have sued their employers had not updated their forms pursuant to the FCRA.


7.    The employer’s screening policy disqualified applicants based on criminal history that is unrelated to the job.


Employers can also be sued for subjecting their applicants to an overly broad and unduly harsh criminal background check.


8.    Failure to follow state specific requirements.


States have passed legislation that impacts the hiring process in specific jurisdictions.


Industry News and Trends

By Brittany Guyton 18 Apr, 2016

“Ban the Box” is an international campaign advocating on behalf of ex-offenders, seeking employment. Their goal is to persuade employers to remove the “check box” from hiring records that asks if applicants have a criminal record. Followers of the campaign advocate that this change will allow employers to consider a candidate’s qualifications first, without the stigma of a criminal record.


New York City and Austin Texas are among some of the cities who have recently proposed amendments and ordinances regarding this issues.


The New York City Commission on Human Rights (NYCCHR) recently issued proposed rule amendments regarding the Fair Chance Act. Although this may be a step toward compromise regarding the “Ban the Box” issue, the amendments pose severe compliance challenges for employers. Some potential violations include; 1) Requesting permission to conduct a background check and 2) Using any standard form across multiple jurisdictions that includes a criminal history question regardless of if the form specifies NYC applicants should not respond.


Requiring employers to use a different employment application or form for hiring in NYC creates a significant compliance hurdle that could cost employers thousands of dollars in penalties.

These proposed amendments also prohibit employers from conducting their own search with terms such as “arrest,” “mugshot,” “warrant,” “criminal,” “conviction,” etc. It is unclear if these provisions prohibiting employers from searching for the specified terms or websites are barred from doing so at any point in the hiring process or just prior to extending a conditional offer of employment. These requirements would leave employers without adequate resources to conduct a criminal history search when needed.



A ban the box ordinance was also proposed in Austin, Texas. Although this ordinance is mostly straight forward, there are major concerns regarding a listed requirement to notify applicants in writing if the adverse action decision is based on criminal history.


Employers that conduct background screenings via Consumer Reporting Agencies (CRAs), the Fair Credit Reporting Act (FCRA) requires a specific process to be followed any time an employer is potentially making an adverse decision (i.e., denying employment, terminating an employee, deciding not to promote an individual) based on information contained within a background report – which may or may not contain criminal history information.


Requiring employers to specifically state that the individual’s criminal history is the basis for an adverse decision, extends beyond the federal requirements which presents potential compliance challenges for employers that hire in multiple jurisdictions


Learn more about the Ban the Box campaign and the concerns surrounding it at


Call Courthouse Concepts for detailed, and thorough background screenings!


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