The 2017 National Association of Professional Background Screeners (NAPBS) Mid-Year Conference concluded a few weeks ago in Washington D.C. The conference did not disappoint on the quantity of information and insight into the regulatory environment facing the background screening industry. Both employers and background screeners have an ever-growing need to stay current on the trends impacting each player in the industry – from pending legislation to plaintiff litigation.
One of the major take-aways from the conference is that companies should simply focus their attention on legal review of applicable company policies, procedures and forms to ensure the proper, most up-to-date, best practices language, exists within each company document. Having good, supporting legal counsel is no longer a luxury within the industry – it is a necessity.
Litigation Trends
The following is a list of topics covered at the conference with a summary of what was discussed:
Seven-year reporting limitations- FCRA Section 605
The Fair Credit Reporting Act (FCRA) states that non-conviction information should not be reported beyond 7-years by a background screener to an end-user – the employer. This has been a long-standing rule, but has come up recently in litigation. Background screeners normally filter out this information and employers should be mindful of this rule as well. Some forms of background checks – namely database searches – will give employers unfiltered information. If this information contains old, non-conviction data beyond 7-years that is then used in an adverse hiring decision, that employer may find themselves in hot water.
Data retention requirements
Data retention was discussed during conference because class action cases against both background screeners and employers are on the rise. Plaintiff attorneys who lead these class action cases often seek the past five years of information as part of the court-ordered discovery phase.
On the other end of the spectrum, employers should also be aware of a shift in philosophy towards data retention on their end. Mainly, employers should not be retaining sensitive information any longer than is required – limiting exposure to data breaches and leaks.
The statute of limitations for the FCRA is five years, though best practices and some state and local laws extend that requirement to six. To maintain a balance between the two opposing forces, it is recommended that organizations institute a five to six-year retention policy for background check data – purging the information once it passed that threshold.
Certification of End-User (Employer) for compliance with FCRA Section 604(b)(1)
End-user certifications are an agreement between the employer and background screener that the employer will follow the Fair Credit Reporting Act guidelines for conducting a background check. These certifications are required for a background screener to provide an employer with background check data. As an end user, you would normally see this information in both your Service Agreement with your background screener and again when submitting each order.
End-User certification is common area for litigation recently. Claims that employers lacked certification for conducting a background check on an individual are increasing in number. Specifically, plaintiff attorneys have been arguing that End-User Certifications are invalidated when a disclosure form provided to an applicant/employee is inaccurate. Common inaccuracies include listing the wrong background screening provider, types of searches being conducted, etc.
There have also been challenges against employer-background screener relationships where the Service Agreement serves as the only End-User Certification. It is suggested that certifications be conducted by the end-user on every background check ordered. This is a process implemented by the background screener.
Matching criteria for better accuracy
To provide the best possible accuracy during the research process, background screeners should require their clients to provide middle names for the subjects of their background checks. You may not know this, but criminal records are filed by full name and date of birth – not Social Security Number. Researchers often have the difficult task of trying to distinguish between two or more John Smiths.
Having the applicant’s middle name ensures that any potential criminal records are correctly attributed. With so many lawsuits that are initiated due to misreported information, having that additional information can make a huge difference.
“Ban the Box” or Fair Chance laws
Fair Chance laws (commonly referred to as “Ban the Box”) have been on the “trending topics” list for a few years running. At this year’s conference, the discussion was centered around the challenges for both background screeners and employers to maintain compliance with “Ban the Box” laws when they are different in each jurisdiction.
“Ban the Box” legislation has stepped into additional areas of the employment screening process. Employers should review the language used in their adverse action processes with legal counsel to ensure compliance with all applicable “Ban the Box” laws.
A day on the hill for NAPBS Advocacy Day
As part of the NAPBS Annual Conference, attendees participated in a day of lobbying on the hill for legislation that benefits both employers and background screening professionals. This year, there were three main subjects worth mentioning:
Live Research vs FBI Fingerprint Database searches
FBI Database searches are often touted by politicians as the standard for background checks in various policies. However, without live research conducted by professional background screeners, the information is not as accurate and complete. NAPBS seeks to both educate and advocate for live research as a more compliant and comprehensive background screening process for the federal government.
FCRA class action caps
While on the Hill, NAPBS also came out in support of the bill recently introduced by the Chairman of the House Committee, Bob Goodlatte (R), “The Fairness in Class Act” that would propose financial award caps for FCRA class action claims. Creating financial caps for FCRA class action suits would benefits employers and background screeners alike. It would set limits on the cost of litigation based on highly-technical FCRA compliance litigation and decrease the incentive for profit-driven plaintiff attorneys.
Certainty in Enforcement Act of 2015
This bill would reduce the Equal Employment Opportunity Commission’s (EEOC) oversight of employer and background screener’s trying to conduct legally required state or federal background checks. The bill includes provisions to account for EEOC disparate impact provisions. The two sets of laws tend to conflict with each other, making it nearly impossible to comply with both. The bill that was originally introduced in 2015 is about to be reintroduced to the house as H.R. 1646.
Just the nutshell…
While the discussed topics put the highlights from the conference in a nutshell, there was plenty more discussed and plenty to keep both employers and background screeners busy with their policies. If you have any questions about these topics or want details further that what was discussed, let us know.
