Background Check

California law also prohibits employers from considering certain criminal background information in making employment decisions, including arrests or detentions that did not lead to a conviction and certain marijuana-related offenses. Many employers are not aware of such restrictions and may take improper adverse actions based on illegally obtained information. Watch Out for Revisions  The regulations relating to consumer reports are continually being updated and revised, and the consumer reporting agencies may not be keeping up with all of the changes, or advising employers of them. For example, as of Nov. 1, 2008, employers who use consumer reports must comply with new regulations issued by the Federal Trade Commission (FTC).  The FTC regulations, which are known as the Red Flag Rules, are meant to protect individuals from identity theft. In short, employers are required to implement a policy as to how to respond when they receive a “notice of address discrepancy” from a consumer reporting agency, and how they will form a “reasonable belief” that the consumer report it received relates to the person at issue. The regulations provide examples of types of actions an employer can take to form this “reasonable belief,” including verifying the information with the individual, or through the company’s own records. If employers do not comply with all of the federal and state laws relating to background checks, they expose themselves to various legal claims. These include invasion of privacy, among other allegations. Such claims can result in significant penalties. For example, the FCRA allows individuals to sue employers for damages in federal court. A person who successfully sues is entitled to recover court costs and reasonable legal fees, and also may seek punitive damages. In addition, the Federal Trade Commission and other federal and state agencies may sue the employers for noncompliance and obtain civil penalties. Given all of this risk and exposure, it is important for employers to review their background check procedures, and seek legal assistance in doing so, to ensure full compliance with the law. Emma Luevano is a partner at Mitchell Silberberg & Knupp LLP and represents management in a variety of labor and employment matters, including sexual harassment and other forms of discrimination, public policy violations, wrongful termination, wage and hour issues, and retaliation.