For the second time in 4 years, Stanford University is the subject of a class action lawsuit over alleged violations of the Fair Credit Reporting Act in their hiring processes. According to the complaint in Richards v. Leland Stanford Junior University et al, an individual applied and was hired to work as a dining hall employee. During the application process Theresa Richard completed a standard application form used by Stanford, which gave Stanford permission to obtain a consumer report.
However, the class action alleges that Stanford failed to make a proper disclosure and get a proper authorization under the FCRA. The specific point identified by the lawsuit include:
- Use of a ‘clear and conspicuous’ disclosure. There should be a document that consists solely of the disclosure with no extraneous information
The complaint seeks statutory damages of up to $1,000 per violation, punitive damages, and attorney’s fees and costs. The complaint asserts potentially thousands of violations of the FCRA and more than one thousand class members. With these numbers, this lawsuit has the potential to be very expensive for Stanford.
This case is a reminder that these forms should contain language that is specific to the request, nothing more. Do not include:
- Language that claims to release you from liability for conducting, obtaining, or using the background screening report
- A certification by the prospective employee that all information in the application is accurate
- Overly broad authorizations that permit release of information that the FCRA doesn’t allow to be included in report
- Wording that purports to require the prospective employee to acknowledge that your hiring decisions are based on legitimate non-discriminatory reasons
Any organization that utilizes background screening to evaluate candidates should also consider the guidance the Equal Employment Opportunity Commission released concerning the use of background screening. Key elements of the guidance include:
- Targeted screening (Green factors)
- Individualized assessment
- Written policy
The “Green Factors” ask an employer to consider nature and gravity of crime, time elapsed since offense, and nature of the job sought by applicant.
An individualized assessment provides an opportunity for applicant to show the exclusion should not be applied due to their circumstances and allows employers to consider more complete information on applicants or employees.
Finally, having a written policy helps formalize the process for an employer and helps mitigate or avoid any potential pitfalls during the hiring process.
- Identify essential job requirements
- Determine specific offenses that may impact person’s ability to do job
- Determine duration of exclusions for criminal conduct
- Record justification for the policy
- Keep records of consultation and research used to craft policy
A comprehensive background screening program can provide tremendous value to any organization. Making the correct hire the first time is vital to continued growth and productivity. Understanding your obligations under the FCRA and knowing what the EEOC looks for when scrutinizing background screening practices is essential. As always, consulting a legal professional is recommended.
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