By Lindsay Burke and Brian Fitzpatrick

On March 10, 2014, the EEOC and the FTC issued joint guidance on how the anti-discrimination laws and the Fair Credit Reporting Act (“FCRA”) apply to background checks performed by employers for employment application purposes. This guidance is published in two documents, one directed at employers and the other directed at employees and applicants, and aims to provide high-level practical assistance and answers to commonly asked questions that arise during the application process.  The pamphlet directed to employers builds off of the EEOC’s April 25, 2012 guidance regarding employer use of criminal history information, which we summarized here, and addresses the request for, appropriate use of, and disposal of such information.

Employers are reminded of their obligation to treat all applicants and employees equally and to refrain from performing background checks in a selective manner, where that decision is or could be perceived to be based on protected characteristics, including medical history (which implicates genetic information). When using background information to make employment decisions, employers must apply the same standards to all individuals and be cautious of basing employment decisions on background problems that may be more common among people of certain protected categories. If a certain type of background check disproportionately impacts members of a protected group, it must be job-related and consistent with business necessity. The guidance does not explain, however, how employers are to discern whether these warnings apply, nor does it mandate that employers conduct any research to investigate these possibilities. 

Any time an employer gets a background report from an outside company, it must comply with the FCRA. To comply, the employer must notify the applicant or employee that the information might be used in making employment decisions and that they have a right to a description of the investigation.  Employers must obtain written permission from employees or applicants to do a background check and provide certain certifications to the company conducting the check. Before taking an adverse action based on information found in a report that falls under the FCRA, an employer must give the applicant or employee a copy of the report and an opportunity to dispute the information.

Although not directly addressed in the joint guidance, the FCRA is not limited to checks of an applicant’s credit standing, but also covers any checks that include information bearing on a consumer’s “character, general reputation, personal characteristics, or mode of living” which is used or expected to be used in making an employment decision.   This can include reports that review applicants’ or employees’ social media profiles or other information available on the internet. Both employers and third parties conducting such reviews must comply with the FCRA.

Employers must retain any personnel or employment records for one year after the records were made, or after a personnel action was taken, whichever comes later. This requirement is extended to two years for certain types of employers. After that period, employers may dispose of the reports and any information gathered from them, but must do so securely.

Tags: "Background Checks", EEOC, Employee Privacy, FCRA, FTC
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Photo of Lindsay Burke Lindsay Burke

Lindsay Burke co-chairs the firm’s Employment Practice Group and regularly advises U.S., international, and multinational employers on employee management and culture issues and international HR compliance. She is a key member of the firm’s Institutional Culture and Social Responsibility practice, working together with…

Lindsay Burke co-chairs the firm’s Employment Practice Group and regularly advises U.S., international, and multinational employers on employee management and culture issues and international HR compliance. She is a key member of the firm’s Institutional Culture and Social Responsibility practice, working together with white collar colleagues to conduct culture assessments, internal investigations of executive misconduct, and civil rights and racial equity audits and assessments. Lindsay has been at the forefront of the changing workplace issues impacting employers in the U.S. in the last decade, including #MeToo, Covid-19, and the renewed focus on diversity, equity, and inclusion. She frequently advises employers in relation to their processes and procedures for investigating complaints of discrimination, harassment, and retaliation and trains executive teams and board members on culture risk and the lawful implementation of DEI programs.

Lindsay also guides employers through the process of hiring and terminating employees and managing their performance, including the drafting and review of employment agreements, restrictive covenant agreements, separation agreements, performance plans, and key employee policies and handbooks. She provides practical advice against the backdrop of the web of state and federal employment laws, such as Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Equal Pay Act, the Family and Medical Leave Act, the Fair Labor Standards Act, and the False Claims Act, with the objective of minimizing the risk of employee litigation. When litigation looms, Lindsay relies on her experience as an employment litigator to offer employers strategic advice and assistance in responding to demand letters and agency charges.

Lindsay works frequently with the firm’s privacy, employee benefits and executive compensation, corporate, government contracts, and cybersecurity practice groups to ensure that all potential employment issues are addressed in matters handled by these groups. She also regularly provides U.S. employment law training, support, and assistance to start-ups, non-profits, and foreign parent companies opening affiliates in the U.S.

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