New Legal Trends Impacting Candidate Screening

The legal landscape related to employment background screening is changing at a much faster pace these days. The federal Fair Credit Reporting Act (FCRA), the Equal Employment Opportunity Commission (EEOC) and state laws and restrictions such as “ban the box” are keeping employers and screening companies alike on their toes.

Here’s what you can do to stay ahead of the game.


Recently, an Ohio employer settled a class-action lawsuit totaling $5.9 million for failure to comply with the FCRA. Specifically, they were cited for obtaining criminal background checks without a signed authorization from the employee and/or applicant as well as failing to conduct proper adverse action notification steps when denying employment.

To protect your organization from a similar fate, make sure your candidates sign a disclosure and release authorization with the required federal (and state) language prior to conducting a background check. If you decide to deny employment based on the results of the background check, you must provide a pre-adverse action notice along with the Summary of Your Rights Under the FCRA and a copy of the report as well as the adverse action notification.


The EEOC has also been a hotbed of activity lately. Through the E-RACE (Eradicating Racism and Colorism from Employment) program, the EEOC is taking a more aggressive stance on the use of criminal records (and credit reports) in the hiring process. The EEOC has long held that unless justified by a business necessity, employers with a bright-line policy and subsequent practice of excluding individuals from employment solely because they have a criminal conviction is unlawful under Title VII of the Civil Rights Act.

Given this heightened scrutiny, it is a good time to review any policies that dictate an unconditional ban on hiring applicants with criminal convictions, and perhaps revise to a more case-by-case approach. Criminal background check policies should account for various factors in determining whether to hire an applicant with a criminal conviction, including the nature of the offense, the nature of the job for which the applicant has applied, and the length of time that has passed since the conviction. Additionally, consider aspects such as the age of the person at the time of the offense, whether there have been multiple offenses as well as any other mitigating factors of the case(s).

State and Local Laws and Restrictions

States have also imposed laws and restrictions related to employment background screening recently. Hawaii, Illinois, Oregon and Washington, with some exceptions, have prohibited the use of credit reports in the hiring process; and other states have proposed similar bills.

Connecticut, Hawaii, Massachusetts, Minnesota and New Mexico have all passed legislation prohibiting employers from using job application forms that require candidates to check a box if they have a criminal history – a so-called “ban the box” initiative. Several local jurisdictions such as Atlanta, Austin, Chicago, Philadelphia, San Francisco and Seattle have enacted or proposed similar measures. If your organization operates in multiple areas across the country, take a close look at your policies and practices for all locations.


Staying abreast of legal trends in the screening industry can be daunting – especially given how quickly the landscape changes. And while information in this article isn’t intended to be legal advice, it should encourage you to be diligent in reviewing your screening and hiring policies against all federal, state and local laws.

When in doubt, work with your background screening partner and legal counsel to ensure your organization has the latest and greatest protections in place.

©2011 Clarifacts