There's a Right Way to Check a Hiree's Credit History

There's a Right Way to Check a Hiree's Credit History ranczandras

The Fair Credit Reporting Act contains an extensive set of regulations governing employer-initiated criminal background checks. As Dilworth Paxson associate Stacey C. Schor explains on the firm’s website, employers who use such checks must tailor their forms to meet the act’s requirements to avoid a legal battle over hiring practices.

She discusses a Western District of Pennsylvania federal case in which several FCRA violations were alleged by a class of plaintiffs against ClosetMaid Corporation. The class alleged ClosetMaid didn’t comply with the disclosure requirements and a subclass of plaintiffs claimed the company failed to provide adequate notice of potential adverse action and an opportunity to contest the consumer report obtained about them.

Under the FCRA, Schor says employers must let applicants know a report is being obtained and receive prior authorization, and the disclosure must be clear and conspicuous. Schor says the court found the company violated the act because the waiver did not constitute an “authorization.”

In the case of the subclass of plaintiffs, the court found only some had been given adequate notice to contest the report, denying the employer’s request for summary judgment for those applicants that only got four days’ warning.

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