July 24, 2014

EEOC, FTC Provide Tips on Use of Employment Background Checks

The U.S. Federal Trade Commission (“FTC”) often looks to the Equal Employment Opportunity Commission (“EEOC”) for advice and assistance on issues related to the various laws, executive orders, and regulatory guidelines that affect the workplace. Therefore, it is no surprise, and perhaps even past time, that the FTC and EEOC co-authored two documents (Background Checks: What Employers Need to Know and Background Checks: What Job Applicants and Employees Should Know) explaining how the agencies’ respective laws apply to background checks performed on job applicants and current employees. 

The documents are noticeably different, as they are written for two different audiences. The EEOC guidance is written for employers and outlines the steps that should be taken when an employer obtains a background check on an applicant or current employee. In addition to reminding employers to not discriminate based on certain protected characteristics, the guidance explains the specific steps that must be taken, which are not necessarily intuitive, before an employer can deny employment (or take other adverse action) based on what turns up in a background check. The guidance also provides information on how long employers must retain these records and the proper method by which such records should be destroyed.

The FTC guidance is written for applicants and employees. It describes generally what is required and prohibited under applicable federal laws. It also states that, “Even if the employer treated you the same as everyone else, using background information still can be illegal discrimination . . . [, and] [i]t doesn’t matter whether or not the information was in a background report.” The guidance includes specifics (and web links) on how to report illegal discrimination and what to do if a background check reveals negative information. 

As noted by the FTC and EEOC, hiring decisions are among the most important for any employer, but the process can be complex. It is further complicated by the fact that while the FTC enforces the Fair Credit Reporting Act (“FCRA”), the authority to issue regulations and collect data on FCRA violations has been assigned to the newly created Consumer Financial Protection Bureau (“CFPB”). 

Still, these joint publications provide some guidance and serve as a reminder that both the FTC and EEOC are focused on the effect of background checks on employment. Employers should review their background check practices to ensure compliance and avoid undue government scrutiny. In addition, employers should be mindful of the numerous state and local laws that prohibit or limit the use of background information in making employment decisions. 

Jackson Lewis P.C. © 2014

About the Author

Kevin D. Holden, Health Care, Litigation, Jackson Lewis Law Firm
Office Managing Shareholder

Kevin D. Holden is Office Managing Shareholder of the Richmond, Virginia office of Jackson Lewis P.C.


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