Transcript The Fair Credit and Reporting Act and Criminal Background

The Fair Credit and Reporting Act
and Criminal Background Checks
STEPHEN P. POSTALAKIS
BLAUGRUND, HERBERT, KESSLER, MILLER,
MYERS & POSTALAKIS, INCORPORATED
[email protected]
OHIO ASSOCIATION OF COUNTY BOARDS
SERVING PEOPLE WITH DEVELOPMENTAL
DISABILITIES
PERSONNEL COUNCIL
SEPTEMBER 29, 2010
The FCRA and Criminal Background Checks -- Overview
 The FCRA imposes specific procedural requirements on
employers that wish to obtain consumer reports
(“Reports”) from a third-party consumer reporting
agency (“CRA”).
 A CRA is “any person which, for monetary fees, dues, or
on a cooperative nonprofit basis, regularly engages in
whole or in part in the practice of assembling or
evaluating consumer credit information or other
information on consumers for the purpose of furnishing
consumer reports to third parties.”
 Background checks are considered Reports under the
FCRA.
FCRA Requirements for Employers
 If a Report is deemed a consumer or investigative report
under the FCRA, and it comes from a CRA, then the
employer:

Must obtain written consent from and provide written disclosure to
applicants or employees in a “clear and conspicuous” stand-alone
document, that a Report has been requested.


FTC says this can be accomplished using a combined
consent/disclosure form.
Prior to taking any adverse action based on the information in the
Report, Employer must provide the individual with a copy of the
report and a copy of the FTC’s Summary of Rights document, and
allow the individual a reasonable period of time to dispute the
accuracy of the information.
FCRA Requirements for Employers
 Employer must issue an adverse-action letter when
implementing any adverse action—i.e. denial of
employment or denial of promotion.
 During “Pre-Adverse Action” stage, Employer should
carefully structure conversations and
correspondence to make it clear to employee that no
adverse decision has yet been made and the
employee has the right to contest the accuracy of the
findings.

Make it clear to employee that no final decision has been made
at the time you are presenting adverse Report finding.
Background Check requirements
(ORC §5126.28/OAC 5123:2-2-01)
 ORC §5126.28: Must perform a criminal
background check (BCII) with respect to any
applicant who has applied to the County Board for
employment in any position.
 OAC 5123:2-2-01: Background check for
Superintendent and direct service employees every
three (3) years

Medicaid HCBS and Medicaid Supported Living
 If applicant not a resident for previous 5 years prior
to application, County Board must request FBI
check.
Are BCII and FBI considered “consumer
reporting agencies” under the FCRA?
 No.
 RESULT: County Boards need not comply with the
notice and disclosure requirements of the FCRA with
respect to reports received from Ohio BCII or from
the FBI.
What about reference checks?
 If the reference check is performed by personnel of
the Board (rather than a third party), AND
 It only concerns communication by a previous
employer about the applicant’s job performance,
 THEN, the FCRA does not apply.

If rely on third parties to investigate, they will be a CRA and
FCRA will apply.
Employee Misconduct Investigations
 Employee misconduct investigation conducted by an
outside investigator are not subject to the FCRA’s
disclosure and authorization requirements.
When do the FCRA notice and disclosure
requirements apply?
 Any consumer report obtained from a consumer
reporting agency:

Examples of consumer reporting agencies:
Credit reports (Equifax, Experian, Trans Union).
 Background investigations and/or screening performed by an
independent third party (private investigator, detective, or private
company that verifies past education, references, and past
employment).

Drug Tests
 Drug tests are not consumer reports under the FCRA
when they are provided directly to the employer.
 If drug test is provided by a CRA, then the employer
must follow notice and disclosure requirements of
the FCRA.
Questions?
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