In this interview, Lester S. Rosen, attorney and CEO of Employment Screening Resources (ESR), discusses the use of criminal records in hiring and developing a strategic approach to an effective background screening program.
Hi Lester, for those of us who are not familiar with your work, can you please introduce yourself?
Thanks. I am a former criminal trial attorney that started a national pre-employment background screening company that has been rated the top enterprise screening firm in the US recently which we are very proud of. The firm is Employment Screening Resources (ESR). I have also written what many consider the definitive book on background screening, “The Safe Hiring Manual,” and was the chairman of the steering committee that founded the screening industry professional organization and served as the first co-chair. That organization is the professional background screening association or PBSA (formerly called NAPBS).
You’ll be talking about a strategic approach to a legally compliant and effective background screening program. What key areas of legal compliance should an employer audit to help hire the best candidates while avoiding legal fallout?
Background screening is actually fairly complicated and is governed by litigation, regulation, and legislation. The two big-ticket items for employers really revolve around the Fair Credit Reporting Act, or FCRA, and laws impacting the fair use and accuracy of criminal records. Both areas are even more complicated because each state has its own rules. There are also state rules impacting numerous additional laws concerning items such as the use of credit reports, social media sites and pay secrecy laws. Employers are caught in that difficult situation where they not only need to exercise due diligence in who they hire but they also need to follow all the rules, laws and regulations that have been passed in order to protect consumers. And of course, another big area on the horizon is privacy. Given all of these legal matters, background screening is morphing into a legal compliance endeavor as well as providing employers information.
How is the Federal Fair Credit Reporting Act impacting hiring?
The part of the Fair Credit Reporting Act that regulates employment has been around since it was amended to take effect in 1997. However, it has not been until recently that the plaintiffs' lawyers have discovered that the FCRA is a fertile ground for class action lawsuits even if it is based on highly technical violations that in reality have a little impact and cause no harm. The FCRA itself does not prevent employers from selecting the most qualified applicants. The FCRA essentially is designed to make sure that job applicants are treated fairly so that they know exactly what is being done and that accurate information is being reported.
Job applicants must consent to the background check and have a number of rights concerning the check such as knowing what will be checked, the opportunity to review their report, the opportunity to object to any report that they feel is incorrect or incomplete and to make sure that reports are accurate. There is nothing about the FCRA that should prevent an employer from making good hiring decisions. However, when an employer does a background check it's very critical to dot every “I” and cross every “T” in order to ensure that a consumer's rights are absolutely protected.
I should note a screening firm cannot give legal advice, but it is helpful to work with a firm that understands compliance. Many employers will run a screening program and the various forms used by their attorneys just to make sure that compliance is not an issue.
What should employers understand about the impact of the EEOC guidance and 'Ban the Box' on the use of criminal records?
Employment in the U.S. is undergoing a fundamental shift when it comes to criminal records. Employers need to be very much aware that criminal records can have a discriminatory impact on job applicants. The Equal Employment Opportunity Commission (EEOC) is concerned about systemic barriers to employment, and if criminal records are used to automatically reduce employment opportunities, that can have an oversized impact on protected groups.
There’s nothing new about the concept that the use of criminal records can be discriminatory since there have been court cases on the topic leading to the first guidance from the EEOC in 1987 that reminded employers that a criminal record needed to be relevant to the job. The EEOC formulated the well-known three-part test that a criminal record needs to be analyzed on the basis of the nature and gravity of the crime, the nature of the job, and the age of the crime.
However, this took on new emphasis with the advent of the ban the box and second chance movement which was concerned about the fact that a criminal record has basically become a new Scarlet Letter that brands an applicant as undesirable and that has significantly handicapped people with offenses in their past from rejoining society with a job. 
The idea is that unless everyone has a job, as a society we will build more jails and prisons than schools or hospitals. Statistics show that a job is the best tool to reduce recidivism and that former offenders often make great employees with a much lower turnover rate.
“Ban the Box” simply means that an applicant is not asked early in the process about a criminal record, since that can lead to an early knock-out punch and the applicant will never have the chance to demonstrate they are a good candidate. The background check comes later in the process at or after a job offer.
The second chance movement has brought this issue to the attention of many Americans and lawmakers who have recognized the need to make sure that a person has a fair chance at employment. In fact, the EEOC revisited the area with updated guidance in 2012, and one of the significant additions was a suggestion that if an employer decided to eliminate an applicant due to a criminal record, that the applicant be given an opportunity to state their case, and that the employer performs an “individualized assessment” of the applicant instead of assuming anything negative just based upon past records.
Ban the Box has morphed into a number of state Fair Chance Hiring laws incorporating the concept “Individualized Assessment,” and not jumping to conclusions. These laws also have other provisions such as certain records that cannot be considered. This Is an area where employers really need to stay on top of things.
Your session features a review of the elements and defenses to negligent hiring lawsuits. Would you mind sharing a few of those elements and defenses that employers should be aware of in regards to negligent hiring lawsuits?
The big issue for employees is can they show if they are sued that they acted with due diligence in the hiring process. In other words, did the employer satisfy a reasonable duty of care in hiring? Employees are not expected to be perfect, and mistakes can happen. But an employer can certainly have reasonable policies and procedures in hiring to attempt to minimize a bad hire.
For those who can’t attend your Friday afternoon session in Las Vegas, what are your recommended actionable steps to avoiding being a part of the current explosion in class action lawsuits related to background checks?
The biggest cause of class action lawsuits are claims based on technical violations of the FCRA. First, an employer needs to use a screening firm that understands the FCRA and are also well advised to ask their legal counsel to review the forms the applicant is given, since that has been a big source of litigation. It's not rocket science. Many of the FCRA class action lawsuits happened simply because employers did not do a legal review of their forms or procedures. Another potential trap for employers is not providing pre and post-adverse action notices. Just a simple audit of your compliance can go a long way towards reducing the risk of litigation.
Switching things up - the entrepreneur in me has to ask a question about the opportunities for employers in regards to the use of criminal records in hiring. Where do you predict the next explosion to take place in the background check industry?
When it comes to criminal records, employers are stuck on the horns of a dilemma. If they ignore criminal checks, and something untoward happens, the employer is sitting duck for a negligent hiring lawsuit. However, if criminal records are used incorrectly, that also can lead to litigation.
The important thing is to have policies and procedures to do things right. In addition, it's helpful to see if a screening firm has been accredited by the Professional Background Screening Association (PBSA), which has an in-depth program to earn the accreditation seal. That does not mean every accredited firm is perfect, but it does show the employer exercised due diligence in selecting their provider.
There are also new avenues of potentially helpful data available to employers. One new concept gaining traction is called continuous monitoring, where records are checked after a person is hired. However, be aware that there are many traps for the unwary and such a program needs to be thought through carefully.
Alright, last question. For anyone who won’t be able to make it to your talk about a strategic approach to a legally compliant and effective background screening program in Las Vegas, what do you want them to know?
Safe hiring really begins way before the background check. A background check occurs at the end of the hiring process, where the employer has or will be extending a job offer, and they want to make sure there is no negative or inconsistent information that they need to know about.
However, firms need to look at their application, reference checking, and interview processes to make sure that they are hiring an honest applicant with the knowledge, skills, and abilities needed.
For example, has the employer carefully reviewed the applicant's resume? Are there unexplained employment gaps? Have past employers been contacted?
Even if a past employer will not give a reference, they will at least confirm work dates and job title, which is incredibly valuable and it shows the employer exercised due diligence. There are also critical questions we will review at the session that can be used at the interview to make sure an applicant is being open and honest.
When employers have good hiring practices, that should dramatically decrease the chance of getting a surprise in the background check report.
Learn more at Lester’s SHRM sessions:
A Strategic Approach to a Legally Compliant and Effective Background Screening Program
In-Person Friday 9/10/2021 03:45 PM - 04:45 PM PT
The Use of Criminal Records in Hiring: Land Mines and Opportunities for Employers
In-Person and Virtual Saturday 9/11/21 02:30 PM - 03:30 PM PT
Brett Farmiloe is the Founder and CEO – and currently CHRO - of Terkel.io, a platform where business leaders can answer questions related to their expertise and get published in articles featuring their
insights. Brett is a #SHRM22Influencers and has also been a keynote speaker at several state SHRM conferences around the topic of employee engagement.
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