It is now the norm that employers use background reports to evaluate job candidates. Additionally, employers may periodically order background reports about current employees to make employment decisions. These background reports, also called consumer reports, can contain highly personal information, including a person’s criminal history, credit history, educational background, employment history, references, and other information.
While employers are allowed to use these reports to make employment decisions, a federal law called The Fair Credit Reporting Act (“FCRA”) creates rights for employees who lose jobs due to information in a background report.
FIRST, YOU HAVE A RIGHT TO SEE THE REPORT. The FCRA recognizes that employment background reports will oftentimes contain inaccurate or misleading information that can harm a person’s employment opportunities. For example, the report could have a different person’s criminal history (called a “mixed file”) or outdated information (e.g., arrest records older than 7 years). For that reason, the FCRA requires employers to provide a notice called a “pre-adverse action notice” BEFORE taking an adverse employment action. The pre-adverse action notice must include a copy of the background report and a summary of your rights under the Fair Credit Reporting Act.
The purpose of the pre-adverse action notice is to allow an applicant or employee an opportunity to clear up any misstatements in the report and to address any negative impressions that it may have created in the employer’s mind. For this reason, the pre-adverse action notice must be provided to the applicant or employee BEFORE the employer chooses to not hire, fire, or demote the applicant or employee. Although the FCRA does not specify how long an employer must wait between providing the pre-adverse action notice and taking an adverse employment action, the Federal Trade Commission has opined that five days is a minimally reasonable period of time to wait.
SECOND, YOU HAVE A RIGHT TO DISPUTE INACCURATE INFORMATION. Background reports frequently contain inaccurate information that may cause a person to lose a job. When a report contains inaccurate information, you have the right to dispute that inaccuracy directly with the background report company (called a consumer reporting agency).
The dispute should explain what is inaccurate in the consumer report and how it should be revised. All disputes should be made in writing and mailed to the consumer reporting agency. Be sure to keep a copy of the dispute for your records, as well as proof of mailing. After filing the dispute, the consumer reporting agency has 30 days to conduct a reinvestigation and to correct the inaccurate information and send a revised report to the employer.
THIRD, YOU HAVE THE RIGHT TO FILE A LAWSUIT. If an employer fails to give you the pre-adverse action notice or if a background report company furnishes a consumer report about you that is inaccurate, you should speak with an attorney at our firm. We routinely litigate cases under the Fair Credit Reporting Act. And even if you’re not interested in filing a lawsuit at this time, we can help provide you with advice on your rights – at no cost to you.