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.


The CHC Blog

By Mark Ridgeway 19 Jul, 2017
As a business owner or HR professional you've been there: you’re at the tail end of a particularly difficult hiring process and you’ve finally found the right candidate for the job. It’s easy to say, “Phew! Glad that’s over,” and move forward with finalizing the details.

But before you do, you should really consider ordering a background check on your candidate of choice. Integrating a background check policy can really benefit and protect your company. Here are 5 reasons you should always run a background check:

1. Stronger hires = Saving Money

Don’t just rely on your “gut feeling.” The more you know about the candidate, the better you will be able to assess if he/she is a fit for the position and for your company. Talent acquisition is a struggle in nearly every industry, so make sure that you’re not cheating yourself out of any of the available information before extending an offer.

It’s important to point out that better hires often means less turnover. We know that turnover is typically the number one cost to employers. Save yourself from investing in the wrong employee for the job.

Aside from turnover costs, as was stated in a previous blog post Who Is Stealing From You , we know that upwards of $50 billion annually in cash and inventory is stolen by employees. Does your job candidate have a history of taking extra "perks" from previous employers?

2. Safer Work Evironment
Running a background check on potential employees before officially hiring them can aide in reducing workplace violence. As an employer, you’ve made a commitment to your current employees to operate a safe work environment. Don’t skip this important step in ensuring that safety.

According to the Bureau of Labor Statistics Census of Fatal Occupational Injuries (CFOI), of the 4,679 fatal workplace injuries that occurred in the United States in 2014, 403 were workplace homicides. However it manifests itself, workplace violence is a major concern for employers and employees nationwide.

3.  Better Compliance in State & Federal Regulatory Requirements
A third-party background screening provider with in-house compliance expertise, can help your company properly create a screening solution. This not only satisfies your industry standards, but also state and federal regulatory requirements, which vary from state-to-state and by type of position you are staffing. Utilizing a partner that is a true expert in this field is important for the success of your company.

4.  Decrease the risk of being sued
Making a bad hiring decision can leave you and your company vulnerable to liability. Ordering a background check can help you find patterns in a person’s history. For example, if a potential employee has had multiple discrimination suits against them, you as an employer may be liable should the employee discriminate within your workplace. Being able to sort out candidates with these issues will help decrease the chances of a lawsuit.

5. Verifying Resumes
Does your candidate have the experience they claim? Do they really have the education and the professional licenses that are listed on their resume? A survey from CareerBuilder  of more than 2,500 hiring managers found that 56% have caught job candidates lying on their resumes.

Background checks can help you weed out the people that do not have the skills for the job. It also can help you verify that the candidate’s resume is valid.  Don’t leave yourself vulnerable to these discrepancies.

Requesting a background check for a prospective employee is perfectly within your rights as an employer. These background check reports can hold vital information that is relevant to your hiring decision. You wouldn’t choose to not gather all of the relevant information when making a different business decision, so don’t skimp here either. Take the time to do your homework and you’ll see the results!

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