The Carolina Investigator

Today it is very difficult to get a job or rent a residence with a criminal record. Some people are denied jobs and/or residency for the most minor of a criminal history. This new reality does not benefit employers or the nation as a whole.

On April 25, 2012, the EEOC provided revised guidelines for the use of criminal records in employment decisions. We advise all tenant screening customers to also be aware of these guidelines.

The EEOC is charged with enforcing the Civil Rights Act.  Courts have determined that some use of criminal background checks by employers can cause a disparate impact on protected classes of minorities.  This guidance updates previous work of the EEOC.  Although the EEOC is not permitted to issue a formal rule, this guidance is important because the EEOC can sue employers on behalf of employees, and the guidance can be used by private plaintiffs.

Employers are not banned from using background checks.  However, they must analyze whether they have a specific acceptable reason related to the nature of the job for requiring the checks.  (NCISS Legislative Update, dated April 25, 2012)

To provide some background, January 2012, Pepsi agreed to pay $3.13 million to applicants in a settlement it reached with the EEOC regarding its use of criminal records. Pepsi denied jobs to any applicant with a criminal record, whether it was an arrest record, dismissed case or a conviction.

In addition, in recent legislation, a Virginia Company and the criminal record database used by the employer, paid each applicant it conducted a criminal record, $50,000. In this instance, the employer denied a job to any applicant whose name appeared in the database with no regard as to the actual owner of the record.

At one time, background screening was conducted by professionals. Today background screening companies have popped up with only purpose of making a quick buck and the effect on the applicant or the employer is of no importance. New businesses have popped up as the database companies sell “background screening businesses” Most of these companies care nothing about the needs of employers or landlords- as now they own a technology company. They consider themselves to be selling “public records” and exempt from the FCRA.

The proliferation of the online “instant criminal record check” has caused major problems and new regulations. There is often no way for wronged job applicants to correct the data. Many companies will refuse to correct the data, so each time the database is used by another employer the same bad data displays. Applicants have to send their expungement papers to every database company as each is individually owned and maintained, and they may not be able to find every company using the database to correct the data. Companies are now popping up offering to help job applicants find and notify every database company of the expungement.

Research has been conducted and published by the national press regarding the devastating effect the use of the so called “national instant criminal record databases” has had on job applicants. The proliferation of these databases on the internet with no regard for either v accuracy or privacy is causing further regulatory review and judicial action.

In response to the new guidelines, CIR wants its clients to be informed and also to review their background screening policy.

Under the Fair Credit Reporting Act, an employer’s obligation is:

1. Obtain a signed release in a document separate and apart from the employment application.
2. Conduct pre-adverse action if the background is returned with possibly disqualifying information, allowing the applicant time to review for accuracy and allow for discussion.
3. Conduct the final adverse action.

Included in these requirements is to identify and supply contact information for the consumer reporting agency (background screening company).  The background screening company must answer the telephone or have other means in which a consumer can communicate with the consumer reporting agency. The company must respond to the applicant and must correct inaccurate data.

The use by employers of these databases creates several problems:

1)      Accuracy and thoroughness of the databases-These databases are NOT national. The court data in these databases is very limited. More and more states and counties are refusing to sell their court data because of the rate of error in these databases.

2)      Lack of dispositions, lack of identifiers, corruption of data, inclusion of expunged cases

3)      Lack of knowledge regarding the use of the database. Although the employer may be conducting the search, the data is consider to derive from a consumer reporting agency, therefore all requirements of the Fair Credit Reporting Act apply.

The article “Broken Records” How errors by criminal background checking companies harm workers and businesses” http://www.nclc.org/issues/broken-records.html details the problems with background screening today. The article is worth reading.

The EEOC offers the following guidelines regarding the use of criminal record histories (http://www.eeoc.gov/eeoc/newsroom/release/4-25-12.cfm )

The Enforcement Guidance issued today is predicated on, and supported by, federal court precedent concerning the application of Title VII to employers’ consideration of a job applicant or employee’s criminal history and incorporates judicial decisions issued since passage of the Civil Rights Act of 1991.  The guidance also updates relevant data, consolidates previous EEOC policy statements on this issue into a single document and illustrates how Title VII applies to various scenarios that an employer might encounter when considering the arrest or conviction history of a current or prospective employee.  Among other topics, the guidance discusses:

• How an employer’s use of an individual’s criminal history in making employment decisions could violate the prohibition against employment discrimination under Title VII;
• Federal court decisions analyzing Title VII as applied to criminal record exclusions;
• The differences between the treatment of arrest records and c(conviction records;
• The applicability of disparate treatment and disparate impact analysis under Title VII;
• Compliance with other federal laws and/or regulations that restrict and/or prohibit the employment of individuals with certain criminal records; and
• Best practices for employers.

The materials for the public meetings held on the use of arrest and conviction records, including testimony and transcripts, are available at http://eeoc.gov/eeoc/meetings/index.cfm.

At this page is also a link to download the employer’s manual. Or also here http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm#IIIB . We recommend our clients review this new guidance.

A criminal record policy is recommended to be included in every company’s employee handbook, which details the business necessity for excluding the job applicant based on the criminal record. According to the article, Broken Records….92% of companies claim crimes of violence and crimes of theft are business necessity.  The EEOC provides guidance on company policy for criminal record checks in the manual http://www.eeoc.gov/laws/guidance/arrest_conviction.cfm#IIIB

Ultimately we encourage employers to give job applicants a 2^nd Chance when feasible. A person should not be punished forever for a crime. It is the job of the justice system to judge and punish the person, while it is the job of a company to do due diligence and protect itself, its employees, and the general public from harmful persons. Length of time since the offense and severity of the crime should be a part of each decision.

Some suggestions you may wish to consider on future background reports:

1)      No arrest information unless identified business need (such as companies working with vulnerable public)

2)      Conviction only reports

3)      Omission of traffic records, after 3 years, except DUI’s and other serious driving offense

4)      Limiting the length of misdemeanor reporting, such as all felony convictions, but misdemeanors only for last 3-7 years,

If you need a sample background screening policy, pre-adverse or adverse action forms, the latest “Summary of Rights under the Fair Credit Reporting Act let us know.

We suggest you review the new guidelines, make sure your background screening policy is up to date, and review your job application to be sure you are not asking “Have you ever been arrested, convicted, etc”, unless you have a definite business necessity. Identify disqualifying information by type of crime, severity of crime, time since the crime and the business necessity of excluding the crime (Such as excluding sex offenders who will be in contact with women, elderly or children). Crimes of violence and theft are business necessity.

The EEOC provides these best practices for employers:

VIII. Employer Best Practices  (http://www.eeoc.gov/laws/guidance)

The following are examples of best practices for employers who are considering criminal record information when making employment decisions.

General

• Eliminate policies or practices that exclude people from employment based on any criminal record.
• Train managers, hiring officials, and decision makers about Title VII and its prohibition on employment discrimination.

Developing a Policy

• Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct.
  • Identify essential job requirements and the actual circumstances under which the jobs are performed.
  • Determine the specific offenses that may demonstrate unfitness for performing such jobs.
    • Identify the criminal offenses based on all available evidence.
    • Determine the duration of exclusions for criminal conduct based on all available evidence.
      • Include an individualized assessment.
      • Record the justification for the policy and procedures.
      • Note and keep a record of consultations and research considered in crafting the policy and procedures.
  • Train managers, hiring officials, and decision makers on how to implement the policy and procedures consistent with Title VII.

Questions about Criminal Records

• When asking questions about criminal records, limit inquiries to records for which exclusion would be job related for the position in question and consistent with business necessity.

Confidentiality

• Keep information about applicants’ and employees’ criminal records confidential. Only use it for the purpose for which it was intended.

I have been away from the blog, but am back now and hope to bring interesting articles and news about private investigations and background screening.  Some of the topics to explore this year:

1) Value of Professional Membership organizations

2) Use of internet databases to conduct background screening.

3) Specialization of private investigations

Related articles

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Below is a consumer article from the Federal Trade Commission regarding background screening and employers duties and responsibilities under the Fair Credit Reporting Act. This is a well written article that I cannot truly improve on and recognize the importance to our clients.  The Federal Trade Commission provides more information about background screening and credit reports. Go to www.ftc.gov

Employment Background Checks and Credit Reports

You’ve applied for a job. You sent a letter, made a phone call, submitted your resume. Perhaps you’ve had an interview. Did you know that when you apply for a job, an employer may ask your permissio to do a background check before hiring you? Depending on the employer and the job, that background information might include your employment history, your driving record, criminal records, and your credit report.

Your credit report has information about where you live, how you pay your bills, and whether you have filed for bankruptcy. Credit reporting companies and other businesses that provide background information sell your file to employers that, in turn, use it to evaluate your applications for employment. Employers also are allowed to use these reports to consider you for retention, promotion or reassignment.

Did You Know? Not only do credit reporting companies provide information to employers, but they also sell it to creditors, insurers and other businesses that, in turn, use it to evaluate your applications for credit, insurance, or renting a place to live.

The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Credit Reporting Act (FCRA), a law that protects the privacy and accuracy of the information in your credit report. The FCRA spells out your rights as a job applicant and an employer’s responsibilities when using credit reports and other background information to assess your application. The law also enables you to get a free copy of your credit report by requiring each of the three national credit reporting companies — TransUnion, Equifax and Experian — to provide it to you every 12 months if you ask. That means if you stagger your requests to each of the companies, you can get a free copy of your credit report every four months.

Applying for a Job? Before you apply for a job, it’s a good idea to order a free copy of your credit report. Each of the nationwide credit reporting companies — TransUnion, Equifax, and Experian — is required to provide you with a free copy of your credit report once every 12 months, if you ask for it. To order, visit annualcreditreport.com or call 1-877-322-8228. When you order, you’ll need to provide your name, address, Social Security number, and date of birth. To verify your identity, you may need to provide some additional information that only you would know — for example, the amount of your monthly mortgage payment if you own a home. Each of the three national credit reporting companies may ask you for different information. If you prefer to order your reports by mail, complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service P.O. Box 105281 Atlanta, GA 30348-5281 You use this form, or you can print it from ftc.gov/credit. For more information about free credit reports, see Your Access to Free Credit Reports at ftc.gov/credit.

Key Employment Provisions

The big picture is this: An employer must get your permission before asking for a report about you from a credit reporting company or any other company that provides background information. If you don’t give your okay, your application for employment may not get a second look. That’s up to you. But if you don’t get the job because of information in your report, the employer has some legal obligations: First, the employer must show you the report; second, the employer must tell you how to get your own copy. The report is free if you ask for it within 60 days of learning the bad news.

Here are more details about these provisions:

Notice and Authorization. Before an employer can ask for reports about you from any companies that provide them, it must tell you that it might use the information to make a decision. This notice is separate from other documents you get — like an application. An employer may not get a report about you for employment purposes without getting your permission or authorization first, usually in writing.

Pre-Adverse Action Procedures. If an employer might use information from a credit or other background report to take an “adverse action” — say, to deny your application for employment or a promotion, to terminate your employment or to reassign you — he must give you a copy of the report and a document called A Summary of Your Rights Under the Fair Credit Reporting Act before taking the adverse action. Read your report, and contact the company that issued it if you find inaccurate or incomplete information.

You also can explain any inaccurate or incomplete information to an employer, but that won’t fix errors in your report. To do that, you have to contact the company that issued the report and dispute the information. If an investigation reveals that a correction is warranted, the credit reporting company or other company providing background information must send an updated report to the employer if you ask them to. Even if the information is not corrected in time to benefit you with that particular employer, it’s a good idea to dispute inaccurate information so it can be corrected before your next job interview or assignment comes along.

Adverse Action Procedures. If an employer takes an adverse action against you based on information in a report, it must tell you — orally, in writing, or electronically. The notice to you must include:

• the name, address, and phone number of the company that supplied the credit report or background information;
• a statement that the company that supplied the information didn’t make the decision to take the adverse action and can’t give you any specific reasons for it; and
• a notice of your right to dispute the accuracy or completeness of any information in your report and to get an additional free report from the company that supplied the credit or other background information if you ask for it within 60 days.

Notice of Negative Public Records

If a company provides an employer with a report that has negative information about you gathered from public records — for example, tax liens, outstanding judgments, or criminal convictions — that company either has to tell you that it provided the information to the employer or it has to take special steps to make sure the information is accurate.

If you get a notice that a company has provided negative public record information to an employer, you may have a chance to correct or clarify it, which, in turn, may help you get or keep a job. For more information about this, see How to Dispute Credit Report Errors atftc.gov/credit.

If Employers Don’t Comply with the FCRA

There are legal consequences for employers who don’t comply with the FCRA, whether they fail to get an applicant’s okay before getting a copy of their credit or other background report, fail to provide the appropriate disclosures in a timely way, or fail to provide adverse action notices to unsuccessful job applicants. If you think an employer has violated the FCRA, report it to the FTC, because the law allows the FTC, other federal agencies, and states to sue employers who don’t comply with the law’s provisions. The FCRA also allows people to sue employers in state or federal court for certain violations.

The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a new video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

May 2010

Below is a story from the Washington Post that highlights the dangers of considering arrest records for employment decision. The EEOC has ruled that it is discriminatory to consider arrest records when hiring.

Precious Daniels was upset with Blue Cross Blue Shield of Michigan for its stance on health-care legislation last year, so she decided to demonstrate her anger with a peaceful protest.

She blocked the doorway of the company’s Detroit headquarters and got arrested for her trouble. Her husband paid the $50 bail, then she was released and told to appear for a court date on a disorderly conduct charge.

When she did, the misdemeanor was dropped. The arresting officer apparently thought so little of the case that he didn’t even file the paperwork.

But the arrest means much more to the Census Bureau.

After Daniels applied to help Uncle Sam count his people, he said no.

To read the complete story, please click here

Should credit scores influence employment or tenant screening decisions?  According to the Associated Press, Americans have lower FICO scores than in the past. See http://www.msnbc.msn.com/id/38205674/ns/business-personal_finance

FICO INc. states that 1 out of 4 Americans have a credit score below 599, which makes them a poor risk for credit cards, car loans, or home loans under the new lending standards. Restricted access to credit is one reason for the slow recovery of the economy.

What are the major reasons for a decline in our scores?

1. 26 million people are out of work or underemployed
2. Millions face foreclosure
3. Those with mid-range scores are finding it harder to qualify for affordable loans
4. Computer generated scores cannot differentiate between people and cause and effect

To read the complete article, click here

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Different states have different requirements for expungement of records. Some states only allow non-convictions to be expunged, while other states allow for expunction once a certain number of years have passed and no new crimes occurred. According to Lawyers.com, ”

The terms “expungement” and “sealing” are often used interchangeably, but there are some differences. “Sealing” is when criminal records are hidden from the general public. “Expunging” a criminal record means that the record is completely destroyed; it’s as if the crime never happened”

Each state has its own definition of expungement, based on different rules and laws. Some states may not use the term “expungement,” but rather terms like “expunction,” “removal,” or “destruction” of criminal records. And even if the term “expungement” is used, the records may not completely “disappear” and may still be available to law enforcement.

For answers to some questions, please see lawyers.com

Here is a state by state look at expunction laws: (provided by www.lawyers.com )

NOTE-THIS IS A WORK IN PROGRESS, AND HAS BEEN MOVED TO ITS OWN PAGE FOR COMPLETION

What is better “taking control of the situation” or using a weapon such as a gun or taser? Carolina Investigative Research is offering a class in Personal Protection or Self Defense. If  interested call or email me. Maximum of 14-16 people per class.

Class is set for August 14, 2010 from 8-5. Learn what to do if an intruder enters the house, or how to “get away” if the intruder/assailant grabs you.

Class Instructor is Woody Best, Retired US Customs, Senior Special Agent; Senioir Instuctor at the Federal Law Enforcement Training Center, and Master Instructor with the Ronin Police Defensive Tactics Association.

Some private investigators found a new niche when keylogging software became available. The manufacturers of this software would advertise at the local PI conferences. Private investigators who thought this would help clients solve cheating spouse cases gladly purchased the software, learned to use it and began to install the software on client computers. Even employers had the software installed to determine what employees were doing on business computers.  At the same conference, we would listen to attorney’s tell us that it was illegal to obtain spouses email, so many of us stayed away from this type of service. Looks like once again, there is no easy way to make money.

The Federal Trade Commission now bars the marketing of keylogging software. (One less vendor at the conferences)

On June 2, 2010 issued the following news release:

The FTC is announcing a settlement that bars the sellers of the “RemoteSpy” keylogger from advertising that the spyware can be disguised and installed on someone else’s computer without the owner’s knowledge. It requires that the software provide notice that the program has been downloaded and obtain consent from computer owners before the software can be installed.

In 2008, the FTC filed suit against CyberSpy Software, LLC and its owner, Tracer R. Spence, alleging they were violating the law by advertising and selling RemoteSpy, a keylogger software program that the defendants touted as a “100% undetectable” way to “Spy on Anyone. From Anywhere.” According to papers filed with the court, the defendants provided their clients with detailed instructions explaining how to disguise the spyware as an innocuous file, such as a photo, attached to an e-mail. When the e-mail recipient clicked on the attachment, the RemoteSpy program was downloaded and installed without the victim’s knowledge. The spyware recorded every keystroke typed on an infected computer; captured images of the computer screen; obtained passwords, and recorded Web sites visited. To access the information gathered and organized by the spyware, RemoteSpy clients logged into a Web site maintained by the defendants.

The final Order bars the defendants from providing purchasers with the means to disguise the product as an innocent file or e-mail attachment. It also requires that they inform purchasers that improper use of the software may violate state or federal law. The final Order also requires the defendants to take measures to reduce the risk that their spyware is misused, encrypt data transmitted over the Internet, police their affiliates to ensure they comply with the order, and remove legacy versions of the software from computers on which it was previously installed.

To read the complete release, click here

The Federal Trade Commission provides a website to help consumers protect themselves online.  http://www.onguardonline.gov. It provides a wealth of information including this game…The Case of the Cyber Criminal

More and more legislation is being proposed that would eliminate the use of credit reports in background screening. What should an employer or landlord consider? The Federal Trade Commission provides guidelines to landlords, employers and background screening companies.

What is a credit report? A credit report is defined by the Federal Reserve as “a loan and bill payment history, kept by a credit bureau and used by financial institutions and other potential creditors to determine the likelihood that a future debt will be repaid.” According to the FTC (Federal Trade Commission) a credit report contains information about where a consumer lives, pays bills, has been sued or filed bankruptcy. The credit bureaus then sell that information to creditors, insurers, employers and other businesses that use it to determine whether or not to extend credit, employment, tenancy, membership, etc. The information affects whether or not a consumer gets a loan and how much interest it will cost to borrow the money. The accuracy of the report is paramount to both the consumer and to businesses who use credit reports. It is an indication of “creditworthiness” i.e. a creditor’s measure of a consumer’s past and future ability and willingness to repay debts.

Good credit is valuable. Having the ability to borrow funds allows us to buy things we would otherwise have to save for years to afford: homes, cars, a college education. Credit is an important financial tool, but it can also be dangerous, leading people into debt far beyond their ability to repay.  A credit history or “credit report” shows prospective lenders whether a consumer is creditworthy by revealing details about the amount of debt the consumer may already have, how many credit cards, and whether the consumer makes payments on time.

Among the most common reasons people are turned down when they apply for credit are:

• Too little time in current job or at current residence.
• Too much outstanding debt.
• Unreasonable purpose for requesting credit.
• Cosigner cannot take on additional debt liability.
• Errors on applicant’s credit report
• Strict creditor’s standards.

See http://www.frbsf.org/publications/consumer/credit.html#footer2 for more information.

For employers-a credit report is often used to indicate an employees ability to manage money for the employer. It is essential when considering a person’s ability as a salesman, any financial position or human resources.

For landlords-a credit report indicates the ability of the individual to pay monthly rent. How credit cards are paid is an indication of how the individual pays monthly bills.

Now many Americans are finding themselves out of work and the bills are mounting.

Background screening is a traditional tool of the investigator. Every investigation should begin with a background check. Who is the person under investigation? What is his history? Does the subject have a propensity to violence?

Background investigations seek to answer the question, “Who is this person?”. Although long used by investigators, employers have also wanted the answer to the same question. Background screening came into play for employers by the late 1980′s. Traditionally background checks were conducted by licensed private investigators. Today, due to lack of effective private investigator licensing, many non-investigative companies are involved in background screening.

Today many databases are available on the web offering a criminal record check, address verification etc with no concern for accurate information. Many people like a quick and dirty look at a person, without realizing the website may contain errors.  It has been verified numerous times by professional background screening companies that the information provided by many online websites are inaccurate, have programming errors that result in faulty results and are not legal to conduct employment or tenant screening.  Although the databases have value to professional search companies, the use by the general public should come with a disclaimer. ‘THIS IS FOR ENTERTAINMENT ONLY, THE RESULTS MAY OR MAY NOT BE ACCURATE. I intend to offer more detail about database searches in future posts.

Many large employment screening companies today send employment screening applicants personal information to overseas companies to conduct background screening on the applicants. As the US does not have “privacy laws“, there is nothing to prevent these companies from sending personal data to be processed overseas. It is a sad day, when a criminal record check on an American is conducted overseas. Evidently “privacy laws” do not apply to Americans anywhere in the world and our personal data has no restrictions. Anybody anywhere in the world can obtain the personal data of Americans.

Every job applicant should ask the company where they are applying who conducts the background checks and whether or not the applicant’s personal information, (name, date of birth, social security number, driver’s license) will be sent out of the country. Companies who retain background companies should ask how the work is conducted. Who does the background check? Is it conducted by a license US investigator, or by a clerical person in India or China.

A company’s membership in NAPBS does not mean the company conducts quality backgrounds. It only means they paid the membership fees. NAPBS is a “anyone can join” association. So on the membership lists, am employer will find many companies that are not “professional background screeners”, but database companies that no one should use for anything other than “entertainment”

Background screening is a critical part of employment decision making. It has a major impact on a potential employees ability to obtain a job or a promotion, a renters ability to live in a domicile, and according to the internet-get a date. Background screening should be conducted honestly and accurately. Employers and employees depend on it. Landlords and renters depend on it. It should be about the facts and not about entertainment.

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