Employee Files-Digging Deeper

How far should you go with background screening?

Security Products, May 2001
By Barry J. Nadell

While it's self-evident that a company should want to avoid hiring disruptive or dangerous employees, headlines continually provide examples of companies that have failed to address this point effectively in their hiring processes. Background screening -- professional or in-house -- is the accepted, cost-effective means of identifying such individuals. However, denying questionable applicants employment without incurring significant legal liabilities has become much more complicated.

Legal complexity has crept into the hiring process in ways that appear contradictory. On one hand, there is the legal doctrine of negligent hiring by which companies can be held accountable and penalized for poor hiring or retention decisions. A case in point is Ward v. Trusted Health, No. 94-4297 (Suffolk Superior Court). Trusted Health Resources Inc. hired Jesse L. Rogers in 1991 as an aide in a home health care program run by the Visiting Nurses Association of Boston. Trusted Health Resources never requested a criminal background on Rogers, but such a check would have revealed six larceny-related convictions in Massachusetts. Likewise, his bogus claims to have worked at a state agency and attended nursing classes at Northeastern University would have been uncovered.

Rogers was later convicted of stabbing to death John Ward, a quadriplegic under his care, and Ward's grandmother. The murders apparently were committed to cover up thefts from the household. Ward's parents brought suit against Trusted Health and VNA, winning compensatory and punitive damages of $26.5 million, sending Trusted Health into bankruptcy.

On the other hand are the Equal Employment Opportunities Commission (EEOC) guidelines against disparate treatment. Disparate treatment (or impact) is defined as different treatment of individuals based on color, religion, sex, age or any of the discrimination terms covered under Title VII. Simply put, businesses are expected to perform due diligence before hiring employees, but their decisions for rejecting applicants must not be discriminatory.

While these legal factors merit thoughtful consideration, they do not change an employer's underlying purposes to learn all appropriate information about an applicant, to verify the information provided or obtained and to act on that information to the good of the organization.

Obtaining Information

The first line of defense for eliminating undesirable employees is the job application. Since the application form should ask as many relevant questions as possible, a one-page application would be a fairly obvious example of an incomplete form. Crucial to the effectiveness of the application (and subsequent interviews) are the questions that may or may not be asked. In some cases, questions may be asked, but any negative information obtained is not, in itself, grounds to deny employment.

Can an employer ask about arrests and then deny employment in learning of an arrest?

In industries such as aviation or law enforcement, employers are prohibited from hiring where there has been an arrest. A similar prohibition exists for health care providers when the arrest is for drug or sex crimes. However, in most industries, an employer is prohibited from seeking from any source whatsoever a record of arrest that did not lead to conviction. Because of disparate impact, denial of a job due to arrest may only cause an employer to be in court more often than necessary.

Until the last few years, many employment attorneys were quick to take the easy way out of convictions and recommend asking, "Have you ever been convicted of a felony?" Today, however, due to variations in treating crimes from state to state, more employment attorneys are realizing that simply asking for felonies does not provide adequate information. For instance, a crime such as battery is a felony in several states, but only a misdemeanor in many others. Further, district attorneys often allow arrests for felonies to be plea-bargained down to misdemeanors due to overcrowding of court dockets.

Due to these factors, the recommended conviction question would be, "Have you ever been convicted of a felony or a misdemeanor?" or, simply, "Have you ever been convicted of a crime?" In either case the qualifier, "A conviction will not be an absolute bar to employment," is required by the EEOC.

A related question, "Have you ever participated in a pre-trial or a post trial diversion program?" is a question an employer may not ask due to the Americans with Disabilities Act. An employer may ask, "Are you currently out on bail on your own recognizance, pending trial?" However, court rulings have made it clear that the employer may not deny employment due to a positive answer. A common practice is to postpone the hiring decision until the case is resolved. If there is no conviction, the position remains open and the applicant is the most qualified, then the employer should hire. However, as might be expected, postponement normally results in the applicant seeking employment elsewhere. The same course of action holds true if the subject has an outstanding warrant.

The EEOC's issued statements indicate that, if asked properly, an employer may inquire about driving under the influence convictions (DUIs). The proper phrasing is, "Have you ever been convicted of a DUI?" A negative response on an application that is later discovered to be false by a background-screening agency establishes that falsification as grounds not to hire. Clearly, it is easier to deny employment for falsification of an application than for any other reason. Therefore, employers today must ask all possible legal questions on the employment application form and then perform a background check to confirm the truthfulness of the applicant's responses.

Verifying Information

Once a prospective employee's application has been obtained and thoroughly completed, the data provided must be verified, or data not provided must sometimes be uncovered. Many employers do not recognize that background checks fall under the Fair Credit Reporting Act. Actually, credit is only about 20 percent of the act's provisions. As indicated below, any type of investigative report into a consumer's background is governed by the FCRA.

"The terms consumer report means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for ... employment purposes ... "--Fair Credit Reporting Act

Employment is specifically recognized by the Act as a permissible purpose for conducting what is commonly called a background check.

In verifying background information, an employer may learn about negative information, such as a crime, that may not be construed as a job-related offense and for which employment cannot be denied. In other words, the EEOC holds that an individual convicted of a crime is not automatically ineligible for employment. Denial of employment must be job-related.

Many job applicants conveniently forget to divulge information specifically requested on an application. Such material omissions are, by themselves, grounds for denial of a position. Time and again, questions about an applicant's criminal past are checked no and a background check reveals the truth, providing a means to legally deny employment.

Acting on Verified Information

How does an employer use the information found in a background screen? The EEOC not only dictates that every decision be weighed against the overall analysis of a candidate, but that a conviction for a crime should be analyzed based upon the nature and gravity of the offense, the time lapsed since the offense occurred and the job applied for. A minor instance of vandalism that occurred as part of a high school prank 20 years before might have little significance for a sales candidate with a good selling record. However, any driving offence might have relevance for someone working at an auto dealership.

Can an employer deny employment due to a conviction? The key question is whether the conviction is job related. Whether the conviction was for a felony or for a misdemeanor is not an issue. Clearly, when hiring someone who can affect the company financially, such as an accountant, a manager or someone directly handling cash or credit cards, an embezzlement conviction can be considered job related. Battery, which is most often a misdemeanor, can be construed as job related, as it is a form of violence.

What about convictions for failure to appear, petty theft or DUI? An employer must analyze whether they have a sound business reason for denying employment in these and other gray area circumstances. Although criminal convictions must clearly relate to job responsibilities, employer awareness of legal liabilities for negligent hiring or negligent retention should send any applicant with a recent history of violent crime out the door.

Many employers consider good character a key ingredient in a job candidate. If good character is important within a company's philosophy, then a case could be made to deny employment based on crimes that indicate an abnormality or defect in the person's character.

The denial of employment for a DUI conviction, specifically, always seems to be a gray area. How many times did one drive drunk to get convicted? How many convictions does it take to deny someone a job based on character? If the applicant answered the DUI question no and the background check shows them to have lied, then the issue of character goes not to the DUI, but to the falsification of the employment application.

Conclusion

Today, employers are concerned about workplace violence, theft and falsified applications. Therefore, the only method of preventive hiring is to ask all appropriate criminal background questions and then verify those answers for authenticity through a complete background screen. In most cases, prospective employees with shady histories will fail to provide the requested information and can be dismissed for dishonesty on the application.

For those who are honest about their transgressions, employers can make an appropriate business decision. Does the negative information obtained indicate a sound business reason or unacceptable character for the position in question? If something goes wrong after hire, are you putting yourself, fellow employees and the public at risk? If so, then the best decision for the security and peace of mind of all concerned is a denial of employment.

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Barry J. Nadell is president and a co-founder of InfoLink Screening Services Inc., Chatsworth, Calif., a nationwide provider of background screening and drug testing programs.