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Tuesday, January 22, 2019

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Case shows importance of sharing all background check reports before revoking a job offer

Case shows importance of sharing all background check reports before revoking a job offer

A recent federal court decision demonstrates the importance of closely following Fair Credit Reporting Act (FCRA) adverse action requirements when using background reports for hiring and other employment decisions.

In Wright v. Lincoln Prop. Co., a federal judge ruled against an employer for failing to send a rejected applicant a final background screening report along with the required notices. The plaintiff had been offered a maintenance position at a residential community owned by Lincoln Property Company of Dallas, a job offer contingent on successful completion of a background check and drug screen.

An in-progress report from a background screening firm revealed a misdemeanor conviction for driving under the influence and two separate drug-related felony convictions. A more comprehensive report including the same criminal findings was delivered by the screening company a week later. Upon revoking its job offer, Lincoln only sent the partial report to the applicant, believing it met adverse action requirements as illustrated by the FCRA.

However, the candidate argued that the employer violated FCRA rules "by taking adverse employment action based on a consumer report without first providing (to him) a copy of the pertinent consumer report." The applicant also said he was not given enough time by Lincoln to contest the report before adverse action was taken.

Lincoln said it revoked its employment offer based on the plaintiff's felony conviction, arguing that there was no meaningful difference between criminal history included in the earlier report and the subsequent final report.

But the court said the earlier report did not allow the plaintiff to contest the full information upon which Lincoln pulled its employment opportunity. The final report “contained a more thorough summary of other types of searches run by (the background check company), such as credit report," the court said. "The plaintiff therefore “remained unable to contest the full information upon which (the employer) relied."

As Lincoln did not send a final report to the plaintiff, the court denied the employer's motion for a summary judgment.

"The court’s ruling does not equate to a blanket requirement that an employer provide all copies of background reports to rejected job applicants or terminated employees," said Pamela Devata, a partner in the Chicago office of Seyfarth Shaw. "It is possible the jury will find that, under these facts, a second pre-adverse action notice was not required. That said, employers that receive corrected or more comprehensive reports after sending the initial report should assess the new report to determine whether to send a subsequent pre-adverse action notice. As this case reflects, that both reports contained the same conviction information that caused the employer to revoke the offer did not spare the employer from the expense and burden of a jury trial."

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