On February 20, 2015 the US 4th Circuit Court of Appeals (covering MD, VA, WA, NC & SC) found in favor of Freeman who was defending against an EEOC lawsuit. In the case of EEOC v. Freeman the court considered a class action lawsuit pursued by the EEOC challenging the employer’s use of certain background checks.
In an earlier post, we highlighted, in detail, the reasons why Freeman won. While everyone else focused on the fact that the EEOC’s expert testimony was thrown out due to incompetence, we wanted to focus on the things that Freeman did right in the hiring process.
It was interesting that in the ruling, the Circuit Court also listed many of the things that Freeman did correctly. The items as listed in the opinion are mentioned below and should serve as a guide for how to properly conduct background investigation checks.
Some highlights of things Freeman did correctly:
- There were different packages for different jobs. This showed they considered the job’s responsibilities and unacceptable behavior that was related directly to the job’s responsibilities.
- Criteria were identified and documented that would result in a dismissal for future consideration.
- The Fair Credit Reporting Act requirements of giving a conspicuous written disclosure and obtaining authorization were followed to the letter.
- Making materially false statements led to automatic disqualification.
- Applicants were given a reasonable amount of time to address outstanding arrest warrants.
- Logs documenting the decision-making process were provided for hundreds of applicants.
Organizations should lean heavily on their consumer reporting agency to help them develop these criteria and enable an audit trail.
EXCERPTS FROM THE OPINION
“In 2001, the company commenced background checks of job applicants’ credit and criminal justice histories. Criminal background checks were required for all applicants, and credit history checks for “credit sensitive” positions involving money handling or access to sensitive financial information. Freeman’s credit and criminal background check policies excluded applicants whose histories revealed certain prohibited criteria. If an applicant’s history included one of the listed criteria, like a conviction for a crime of violence, the applicant was not hired.” (Page 3 of the opinion)
“Freeman required a form authorizing a background search to be completed with each job application, which, according to a company handbook, Freeman thought would “deter individuals with negative information from applying.” However, the checks were not conducted until after a conditional offer of employment had been made. It appears most criteria, as well as making false statements on the job application, led to automatic disqualification. But, Freeman usually gave applicants a reasonable amount of time to resolve outstanding arrest warrants before rescinding an offer. (Page 4 of the opinion)
“Freeman provided the EEOC with complete background check logs for hundreds,” (Page 7 of the opinion)