Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

BusinessWeek has an in-depth article this week on business checks and the accuracy of those records.  Its a thought-provoking article that suggests that background checks are a "Wild Wild West" where nothing is regulated.  Moreover, despite the headline that question the accuracy of background checks, the article itself doesn't contain any statistics or studies to show that. Rather, they use anecdotes to make the point.

But when you look at the article, I was struck by one paragraph that's buried deep in text:

The company [ChoicePoint] conducts 10 million background checks annually and estimates it has about 20% of the U.S. market. "The number of complaints vs. transactions is very low," says Katherine Bryant, vice-president for consumer advocacy. The [Federal Trade Commission] has logged 695 complaints against ChoicePoint since 2005, some of which related to [a single] identity-theft episode.

So, for those doing math at home,and if these numbers are to be trusted, there is a 0.000023 percent complaint rate over the last three years filed with the Federal Trade Commission for background checks conducted by ChoicePoint.  That doesn't strike me as a huge issue whatsoever.

Are there issues with faulty records on some? Absolutely.  But the numbers presented in this article hardly suggests a rampant problem with background checks.

And as for the contention that background checks are fairly unregulated, that's an overstatement as well.

For employers, following the Federal Fair Credit Reporting Act  is an important  part of avoiding liability for background checks.

As its core and very broadly, the FCRA imposes three general requirements on a company that seeks to obtain and use a background check (known as a "consumer report") for employment purposes: 

(1) the company procuring the report must make certain disclosures to, and obtain authorization from, the job applicant;
(2) the company must make certain representations to the consumer reporting agency from which the report is procured; and, 
(3) the company that uses that report for employment purposes must make certain disclosures to the applicant both before and after taking any adverse action against the applicant based on the report.

I've discussed these requirements further in a prior post available here. 

The Federal Trade Commission, the government agency responsible for oversight of this law, has a good primer on the subject for employers. 

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Lots of interesting posts and articles and so little time.  So just quick hits today on some new and interesting developments.

• The Genetic Discrimination Nondiscrimination Act (GINA) became law on Wednesday.  I highlighted the bill a few weeks ago and opined that it's not going to have a big impact on Connecticut in light of the state requirements already in place. For another recap, the Employer's Law Report has a pretty good summary here.
  
  
• A group called the Families and Work Institute released a survey on Wednesday studies the practices of U.S. employers as they relate to work-life issues.  Nolo's Employment Law Blog has the details.  Interesting factoid? "Racial and ethnic diversity at the top predicts a more work-life friendly workplace."  Other notable fact? Employees are paying more for some of their benefits.
  
  
• The New York Times had an interesting piece this week on background checks, not simply for line workers -- but for executives as well.  One "expert" provided the following guidance:
  "[The expert's] primary recommendation is to screen all potential employees, starting with their résumés. If you detect a single lie, he says, throw the résumé in the wastebasket.Be wary, too, of claims that are difficult to verify, gaps in applicants’ job histories and vague descriptions of what they did."  I've talked about the need for such checks and how Connecticut's criminal records are now available on state websites. 
  
  
• With the high price of gas, will more employers start to consider telecommuting for employees? After all, those employees with long-distance commutes are assuredly feeling the pinch.  The Pennsylvania Labor & Employment Blog has a post about some of the legal issues involved in telecommuting.  I've touched on Connecticut's approach to the issue in this post last October.
  
  
• Finally, on the human resources front, Kris Dunn over at HR Capitalist has a thought provoking piece about the interview process that many companies engage in. His theory? Perhaps to ditch the second interview and see how the candidates respond to a "real-life situation".  Given the pitfalls and the unpredictability of interviews, and the risks of hiring "duds", it's an interesting thought.
  

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Without much fanfare, the Connecticut Judicial Branch is now posting criminal conviction records with free access to the public. You can view these records at this link here.  It is easy to search and easy to use.

The possibilities in the employment context are deep and wide as employers may now seek to review this database for hiring purposes or even to look up existing employees.  For example, the prior convictions of Joshua Komisarjevsky, one of the suspects accused in the murder of various Petit family members, are all up there.  You can see and trace that history fairly easily.   

First, a bit more about the details (from A Public Defender):

As promised by Representative Mike Lawlor months ago, the criminal disposition database is now online. You can search by last name and birth year, courthouse, docket number. This covers criminal and motor vehicle cases.

...It gives you his name, his lawyer’s name, his lawyer’s juris number (state bar number), his year of birth, his arrest date, the arresting agency, the sentencing date, and then a lot of information about the offenses of conviction, including the sentence, what he pled to initially, the date of the offense, the date of the verdict.

For state employers, the ease of this access can be a tease, particularly given the state's law prohibiting the use of some criminal conviction information for purposes of making employment decisions.  Connecticut's public policy is to encourage employers to hire qualified ex-offenders.  (Conn. Gen. Stat. Sec. 46a-79.) Law enforcement agencies (which include Sheriff's Department court house security and transportation personnel) are the only governmental entities in the state that by law can deny employment based solely on a person's criminal history.  In all other cases, state officials cannot deny felons employment, occupational licenses, or permission to engage in state-regulated professions without examining (1) the relationship between the crime committed and the job or license that the person is being considered for, (2) the convicted person's degree of rehabilitation, and (3) the time elapsed since conviction or release.

For private employers, there are no such restrictions on the use of conviction records for purposes of making employment decisions.  The only relevant restrictions for employers prohibit the use of erased criminal records (Conn. Gen. Stat. Sec. 31-51i).  Indeed, subsection (f) reminds employers that while there is no restriction on the use of criminal records, such information must be restricted to those with a "need to know" within the company -- normally the human resources personnel or the person making the decision to hire the applicant.

That said, the use of an outside service to conduct the background checks may still run into issues with the Fair Credit Reporting Act, as I outlined in a prior post.   

While the criminal defense attorney bar may lament an "invasion of privacy", this information has always been available to the public --- just not as easily as before.   It is a very useful resource to have -- whether for employers or in the civil litigation context.  Kudos the judicial branch for putting forth a database that is a useful resource for the public.

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George Lenard, who runs the popular "Employment Blawg", has an interesting post this week about how current job seekers will have to undergo different scrutiny than perhaps the last time that they engaged in a job search.  As George notes, the biggest change is the prevalent use of background checks by employers.  George provides some useful tips to job seekers about what this means during the interview process.

For employers, some (but by no means all) will use these checks without a clear understanding of the laws that may be implicated. Indeed, some employers who do hiring infrequently, may not be aware of the extent of the development of this area of law.  This post will discuss one aspect of such compliance -- the Federal Fair Credit Reporting Act.   

As its core and very broadly, the FCRA imposes three general requirements on a company that seeks to obtain and use a background check (known as a "consumer report") for employment purposes: 

(1) the company procuring the report must make certain disclosures to, and obtain authorization from, the job applicant;
(2) the company must make certain representations to the consumer reporting agency from which the report is procured; and, 
(3) the company that uses that report for employment purposes must make certain disclosures to the applicant both before and after taking any adverse action against the applicant based on the report.

The first and third obligations require a bit more explanation.  What is meant by the first requirement? Typically, a clear and conspicuous disclosure-- in a stand-alone document -- in writing to the applicant that the report may be obtained for employment purposes, and then, written authorization from that applicant.

Regarding the third set of requirements, before not hiring the employee based, in whole or in part, on information in  that report, the company must provide a copy of that report and a description of the applicant's rights.  After taking an adverse action (i.e., not hiring the applicant), the company must provide further notice of the adverse action in a format that discloses, among other items, the name, address and phone number of the company that provided the background check. 

Of course, there are other state requirements that may apply, in addition, to other rules under FCRA itself.  For example, there are additional requirements for the use of "investigative consumer reports" and there are exceptions to the above rules (such as when criminal activity is suspected) that may apply. 

But for employers using background checks, alarm bells should go off when doing so.  In today's age when doing a background check appears as simple as typing in some names or social security numbers into a computer database, nothing is that simple about these checks.   If employers are not following the rules, they risk substantial liability in the future for breaking them.  The Federal Trade Commission, the government agency responsible for oversight of this law, has a good primer on the subject for employers as well. 

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In an important decision to be officially released next week, the Connecticut Supreme Court has found that a qualified privilege exists to employers giving job references.

Specifically, in an issue of first impression, the court has now "recognized a qualified privilege for the employment references of current or former employers that were solicited with the employee’s consent."

In Miron v. University of New Haven Police Department, a unanimous Court rejected a former employee's defamation claim against the employer even if the employer -- in the course of providing a good-faith assessment -- issues false statements.

Why? Justice David Borden (who incidentally is now a Judge Trial Referee) writes:

We believe that the integrity of employment references not only is essential to prospective employers, but also to prospective employees, who stand to benefit from the credibility of positive recommendations. ...

It also would encourage a ‘‘culture of silence’’ not to afford a qualified privilege
to employment references that are made in good faith and without improper motive.

The decision, which adopts the rule set out in the Restatement of Torts and 19 other states, has the potential to have a dramatic impact on employment references in the state.

Many employers subscribe to the "name, rank and serial number" theory of references: just confirm the dates of employment and position, and nothing more.

For those employers, not much will change. But for those employers who wish to provide something more, this decision provides a safe harbor of sorts.  (Savvy employers who wish to get information about prospective employers can also use this decision to try to persuade the former employer to give up more information than "dates of employment and position" as well.) 

The key to establishing this privilege appears to be found not only in the court's language that the references be made "in good faith" and "without improper motive" but also that the references be sought with the employee's "consent".   

For prospective employers, written authorization from the applicant should be sought in the hiring process to check references. For former employers, getting a copy of that written authorization, while perhaps not required, may not be a bad idea in particular cases.  But how this will play out in practice remains to be seen. 

The court's decision contains several other important nuggets for employment practitioners that I'll touch on in the upcoming days.  But for now, because the Court speaks so rarely on employment issues, the decision is worth a look at as sign as to how the current court views such cases.  For employers, its certainly an encouraging sign. 

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