Additional Consumer Privacy Protections Codified in the California Consumer Privacy Act go live!

On January 1, 2023, new privacy rights for California consumers went into effect under the California Privacy Rights Act (CPRA).  Businesses have several responsibilities associated with compliance with this statute, including responding to a consumer request to exercise these rights and giving consumers certain privacy notices. The final text for the CPRA is available here.  In March 2023, the California Privacy Protection Agency issued regulations amplifying information about the CPRA.

Consumers Gained Protected Privacy Rights in 2018

The California Consumer Privacy Act of 2018 (“CCPA”) provided consumers with more control over the personal information that businesses collect about them and provided consumers with certain rights, including:

  • Knowing about the personal information a business collects on them and how that business uses and shares the information.
  • Deleting personal information collected about them, subject to certain exceptions.
  • Opting out of a business selling or sharing their personal information.
  • Non-discrimination in exercising these rights.

Additional Privacy Rights added in 2020

In November 2020, California passed the CPRA, which amended the CCPA, adding the following additional privacy rights for consumers that began on January 1, 2023:

  • The right to correct inaccurate personal information that a business has about them.
  • The right to limit the use and disclosure of sensitive personal information collected about them.

What Information Is Protected under the CPRA?

The CPRA defines protected information as personal information or sensitive personal information:

  • Personal Information is “information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly” with a particular consumer or household. This includes but is not limited to:
    • Name;
    • Social Security number;
    • Email address;
    • Internet browsing and search history;
    • IP address;
    • Geolocation data; and
    • Professional or employment-related information.
  • Sensitive Information is a subset of personal information that includes but is not limited to information that reveals:
    • Government identifiers, such as a Social Security number;
    • An account log-in, financial account, debit card, or credit card number coupled with any required security code, password, or credentials that enables access to an account;
    • Contents of mail, email, and text messages;
    • Genetic or biometric data;
    • A consumer’s precise geolocation; and
    • A consumer’s racial or ethnic origin, religious or philosophical beliefs, or union membership.

The CPRA excludes publicly available personal information from federal, state, and local government records from protected information.

Not all Businesses are Impacted by the CPRA

While businesses in the state may want to become familiar with these new regulations, the CCPA, as amended by the CPRA, only applies to certain businesses and contains other exemptions.

Specifically, the CPRA does not generally apply to government agencies or nonprofit organizations, and only applies to for-profit businesses that:

  • Have a gross annual revenue of over $25 million;
  • Buy, sell, or share the personal information of 100,000 or more California residents, households, or devices; or
  • Derive 50% or more of their annual revenue from selling California residents’ personal information.

The CPRA also identifies several categories of businesses, including credit reporting agencies, that are exempt from the requirements of the CPRA.  And businesses outside of California may also want to be aware that the International Association of Privacy Professionals reports that other states have similar bills in various stages of legislation concerning consumer privacy – and data privacy generally. Consult your attorney to find out how this amendment, or other laws, may affect you.

New Summary of Consumer Rights Under the Fair Credit Reporting Act

It might be time for spring cleaning to ensure your business complies with updated background screening laws. The Consumer Financial Protection Bureau (CFPB) has recently revised its Fair Credit Reporting Act (FRCA) Summary of Consumer Rights.

The revised FRCA Summary of Consumer Rights may be used immediately, but its use is not required until March 20, 2024; it replaces an earlier version set in place in October 2018. The document includes updated information about consumer rights under the FCRA and information about how consumers can obtain a security freeze on their credit reports.

What do the recent Summary of Consumer Rights revisions include?

The revisions include:

  • Non-substantive corrections
  • Updated contact information for several governmental agencies, including but not limited to the following:
    • Consumer Financial Protective Bureau (CFPB)
    • Office of the Comptroller of the Currency (OCC)
    • Federal Deposit Insurance Corporation (FDIC)
    • National Credit Union (NCUA)
  • Updated references to obsolete business types

What difference does this update make for employers?

There is a grace period to implement all effective changes, but employers must implement the updated Summary of Consumer Rights by March 20, 2024. At that time, the updated notice must be provided to applicants and employees when conducting background checks and taking adverse action related to background checks.

The FCRA Summary of Consumer Rights is prepared and maintained by the CFPB. It must accompany a consumer report furnished for employment purposes and any pre-adverse action notice. Verified Credentials also publishes a copy of the FCRA Summary of Consumer Rights to customer Candidate Verification Centers.

Employers may want to consult their attorney regarding the circumstances requiring delivery of the FCRA Summary of Consumer Rights, but when it is used, be sure to include this most up-to-date version.

Automatic Expungement Legislation Gains Momentum Across the United States

In the past, to get a court record sealed or expunged, individuals were required to complete the process on their own. Today, it is becoming more common for states to expunge certain records automatically. Some new or pending automatic expungement laws are specific to records related to marijuana, like Mississippi (S.B. 2267) and Nebraska (L.B. 634). Others are more open-ended such as the following list of pending legislation:

Michigan has been a leader in a growing trend of automatic expungements across the United States. In fact, Michigan enacted its Clean Slate Act in April 2021 – just over two years ago.

Michigan Begins Automatic Expungements

The Michigan Clean Slate Act was enacted in 2021 but automatic expungements under the Act did not commence for two years.  Starting on April 11, 2023, Michigan began automatic expungements of misdemeanor and felony conviction records without an application, as was previously required.

Michigan court records that are eligible for automatic expungement include:

  • Misdemeanors punishable for less than 93 days – Automatically expunged 7 years after sentence imposition.
  • Misdemeanors punishable for 93 days or more – Automatically expunged 7 years after sentence imposition. A maximum of four convictions are automatically expunged.
  • Felonies – Automatically expunged 10 years after sentence imposition or imprisonment release – whichever is later. A maximum of four convictions are automatically expunged.

Misdemeanors and felonies are ineligible for automatic expungement if:

  • The waiting period has elapsed;
  • The individual has pending criminal charges in the state police database;
  • The individual has been convicted of any criminal offense recorded and maintained by the state police database during the waiting period; or
  • The record involves a conviction for:
    • An assaultive crime
    • A serious misdemeanor
    • A crime of dishonesty
    • Any other offense punishable by 10 or more years imprisonment
    • A violation of the laws of this state listed under chapter XVII of the code of criminal procedure (1927 PA 175, MCL 777.1 to 777.69) which involve a minor, vulnerable adult, injury or serious impairment, or death
    • A violation related to human trafficking

In some cases, however, records that are automatically expunged may be reinstated. Those include records that:

  • Were improperly or erroneously expunged; or
  • Are accompanied by a restitution order, and a court finds that has been no good-faith effort to pay the restitution.

Michigan’s Automatic Expungement Process

Michigan is processing automatic expungements every day. The process looks at records in the state police database for new, eligible convictions. The Michigan State Police is responsible for reporting eligible records to state courts, where expungements are processed.

Individuals with records that are not eligible for automatic expungement can still apply for expungement under the traditional process.

While Michigan’s Clean Slate Act impacts records in the state police database, out-of-state employers could still be affected if they seek records from the state. Additionally, these laws are becoming more common across states. Employers looking for more information on how this could affect them may want to consult their attorney.

Fair Chance Hiring Up for Consideration in Gainesville, Florida: How it May Impact Private Employers

If you do business in Gainesville, Florida, you could join the collective of cities and states adopting Fair Chance Hiring Laws. If the proposed ordinance passes, certain private employers with over 15 employees could have a list of stipulations to follow.

What Employers Could This Affect?

As currently drafted, the proposed ordinance defines an employer as:

“A person, company, corporation, firm, labor organization, or association that employs at least 15 individuals who worked in the city each working day for 20 or more calendar weeks in the current or preceding calendar year. The term includes an agency acting on behalf of an employer. The term also consists of the city.”

The term does not include:

  • The United States government, any of its departments or agencies, or any corporation wholly owned by it;
  • The government of the State of Florida or any of its departments, agencies, or political subdivisions;
  • A business that is exempt from taxation under Section 501(c) of the Internal Revenue Code;
  • Daycares and other care facilities as defined by Florida Statutes;
  • Or any other entity excluded by operation of state or federal law.

Fair Chance is all About Fair Chance

WCJB News reported recently that people who were in prison may soon have a better shot at gaining employment. The subject of a person seeking employment with a criminal record is not new. SHRM estimates that almost 80 million people in the U.S. have a criminal record of some sort – that’s over one-third of the adult population.”

According to the proposed law, an employer may not post a job that implies that criminal history automatically disqualifies the candidate. Plus, the employer is not permitted to ask about any criminal history on the job application. This includes soliciting from a job applicant or otherwise inquiring through a third-party about any arrests or criminal accusations, other than an arrest or accusation related to domestic violence, which is not currently pending against the applicant or did not result in a conviction, or other certain dispositions as defined within the law.

Once a conditional offer is made to the candidate, the employer may ask about criminal history. Staffing agencies may solicit criminal history to make an individualized assessment of that history if they have identified a potential job for the candidate, or to place them into a staffing pool. Other stipulations of this proposed ordinance include:

  • Forbidding an employer from refusing to consider the person for employment because the individual did not provide criminal history information before the individual received a conditional employment offer.
  • Adverse action may not be taken because of the criminal history unless the employer determines that the candidate is unsuitable for the job based on an individualized assessment.
    • Before taking adverse action because of an individual’s criminal history, notice must be given to the applicant. This notice must inform the individual of the basis for the decision and must provide the criminal history records used by the employer in consideration of the individual’s application. A reasonable amount of time should be given to the applicant to explain the context of the record and to provide any information demonstrating rehabilitation and good conduct since the criminal offense.
    • If an employer chooses to move forward with the adverse action, they must give written notice that the decision was made on the person’s criminal history. This notice must include a statement outlined within city law along with the notice.

Violations Could Prove to be Significant

Like other local “Ban-the-Box” style laws, the proposed ordinance includes penalties for violations. The law proposes that first time violations may receive a $500 civil penalty. Alternately, the Office of Equity & Inclusion may issue a warning if the employer attends an appropriate training session about complying with this ordinance. For each subsequent violation, the employer may be subject to a civil penalty of $1,000.

This Gainesville Fair Chance Act is not yet law. The legislative process may change portions of this law. Verified Credentials will monitor and provide updates on this pending ordinance.

Form I-9 Flexibility Coasts into Summer

In July of 2023, it will be more than three years since the U.S. Department of Homeland Security (DHS) began offering certain I-9 compliance flexibility for employers. We’ve published multiple updates and notices regarding the longstanding temporary compliance flexibility.

To recap, I-9 flexibility began in March, 2020 because DHS recognized the impact COVID-19 was having within the workplace. It became difficult for employers to physically review their employee’s identity. DHS stated it would “exercise discretion to defer the physical presence requirements related to [Form I-9].”

This latest announcement extends flexibility to July 31, 2023. The I-9 compliance flexibility permits certain employers that engage employees in remote work to inspect employee documents over video, fax, and email. Then they need to obtain, check, and retain physical copies of the documents within three business days. If in-person operations resume, employees onboarded using the remote inspection option must report in within three business days so that their documents can be inspected and verified in person.

But there are some limitations that employers have to keep in mind:

  • Employers that use the remote inspection option must provide a written statement about their remote onboarding and telework policy for each employee.
  • DHS provided language that needs to be on the I-9 Form if they must delay in-person inspection. Employers that take advantage of I-9 compliance flexibility may want to review DHS announcements and make sure that their I-9 forms meet DHS requirements.
  • I-9 flexibility is only for remote employers and workplaces.

No exceptions exist if employees are physically present at a work location. They should continue to verify identity as they did prior to DHS granting temporary I-9 compliance flexibility.

Repeated extensions seem to have become the norm since the initial announcement of temporary I-9 compliance flexibility. Even though I-9 flexibility is continuing, employers may also want to note that  the DHS announcement also states:

“Employers are encouraged to begin, at their discretion, the in-person verification of identity and employment eligibility documentation for employees who were hired on or after March 20, 2020, and who presented such documents for remote inspection in reliance on the flexibilities first announced in March 2020.”

In a separate statement, DHS announced that employers should keep using the current I-9 Form. Even after the expiration date of October 31, 2022, employers should use it until further notice. Monitor I-9 Central and Verified Credentials Industry News for information and announcements from DHS.

Employers Begin to Face Legal Complaints for Cannabis Use Discrimination

Laws that limit how employers may legally test for cannabis use are one of the latest trends in employment laws. We recently covered new or pending laws in California, Washington, D.C., and Philadelphia. Employers are beginning to face legal action for accusations of non-compliance with cannabis laws. A complaint initially filed in the Superior Court of New Jersey, Gloucester County, claims that Walmart violated one such law.

What New Jersey’s Cannabis Testing Law Says

The state of New Jersey is one location with restrictions. The New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) states,

“No employer shall refuse to hire or employ any person or shall discharge from employment or take any adverse action against any employee with respect to compensation, terms, conditions, or other privileges of employment because that person does or does not smoke, vape, aerosolize or otherwise use cannabis items, and an employee shall not be subject to any adverse action by an employer solely due to the presence of cannabinoid metabolites in the employee’s bodily fluid from engaging in conduct permitted under P.L.2021, c.16 (C.24:6I-31 et al.).”

CREAMMA does allow employers to test for cannabis if there is “reasonable suspicion” that an employee may be under the influence. The New Jersey Cannabis Regulatory Commission recently released guidance for employers on what “reasonable suspicion” means to help employers maintain compliance.

Walmart Accused of Violations

The complaint filed against Walmart stems from an employment decision in early 2022. According to the complaint, Erick Zanetich applied for an Asset Protection position with the company in January 2022. Walmart offered Zanetich the job in February under the condition that he pass a drug test. After he submitted his test, the testing facility notified him that he tested positive for cannabis and that they would notify Walmart. Not long after, Walmart Human Resources notified Zanetich that they had rescinded his job. The deciding factor was the positive cannabis drug test.

Zanetich filed a complaint against Walmart on August 5, 2022. He is attempting to obtain a class action that includes candidates from February 22, 2021, and later, who were:

  • Denied employment by Walmart in the state of New Jersey for a failed pre-employment cannabis drug test Subject to any adverse employment action by Walmart in the state of New Jersey because they tested positive for cannabis

The allegations filed in court include that:

  • Zanetich and class members were subjected to adverse employment action solely because of testing positive for cannabis.
  • Walmart’s policies that result in adverse action based on testing positive for cannabis violate CREAMMA.

Walmart Fights Back

In September 2022 Walmart removed the case to federal court.  On October 7, 2022, Walmart attorneys filed a motion to dismiss in the United States District Court of New Jersey. According to the motion, among other things, Walmart argues “although the CREAMMA states that, ‘[n]o employer shall refuse to hire or employ any person . . . because that person does or does not smoke, vape, aerosolize, or otherwise use cannabis items,’ there is no express private right of action by which an employee can enforce this provision by way of a civil lawsuit.”. In other words, employees have no grounds for enforcement through civil lawsuits.

Instead, Walmart argues that the law states that the Cannabis Regulatory Commission is the sole regulatory authority. They conclude that since the law doesn’t include an express private right of action, the court should dismiss the complaint. The case is pending, and the court has not yet ruled on the motion to dismiss.

While there is yet to be a final decision, it may serve as a good reminder for employers to stay on top of the developments in new laws. Employers may want to review new legislation in their areas with their legal team to align their screening process.

New Jersey Releases Guidance for Identifying Suspected Employee Impairment

Like several other states, New Jersey law restricts how employers may make employment decisions based on cannabis use. The law states,

“No employer shall refuse to hire or employ any person or shall discharge from employment or take any adverse action against any employee with respect to compensation, terms, conditions, or other privileges of employment because that person does or does not smoke, vape, aerosolize or otherwise use cannabis items, and an employee shall not be subject to any adverse action by an employer solely due to the presence of cannabinoid metabolites in the employee’s bodily fluid from engaging in conduct permitted [by state law].”

While the restrictions are fairly comprehensive, there are still situations where employers can test for marijuana. An employer can require an employee to take a drug test when there is “reasonable suspicion of an employee’s usage of a cannabis item while engaged in the performance of the employee’s work responsibilities, or upon finding any observable signs of intoxication related to usage of a cannabis item, or following a work-related accident subject to investigation by the employer.”

Drug tests may also be done randomly by employers, or as part of pre-employment screening, or regular screening of current employees to determine use during an employee’s work hours Drug tests shall include scientifically reliable objective testing methods to determine the state of impairment. Methods might include blood, urine, or saliva, in addition to a physical evaluation.

How Employers May Identify Impairment

A portion of New Jersey’s law relates to whether or not an employee shows signs of impairment on the job. So, what signs of impairment from cannabis use might employers look for? The law states:

“In order to better ensure the protections for prospective employees and employees against refusals to hire or employ, or against being discharged or having any other adverse action taken by an employer, while simultaneously supporting the authority of employers to require employees undergo drug tests [permitted by the law]… the [New Jersey Cannabis Regulatory Commission] shall prescribe standards for a Workplace Impairment Recognition Expert certification to be issued to full- or part-time employees.”

Standards for issuing Workplace Impairment Recognition Expert (WIRE) certifications have not yet been released by the New Jersey Cannabis Regulatory Commission. However, on September 9, 2022, the Commission issued guidance for employers to identify signs of impairment while they work to identify and approve certification standards.

According to the guidance, in order to demonstrate physical signs or other evidence of impairment during the employee’s scheduled work hours employers may:

  • Designate an interim staff member to help make determinations of suspected cannabis use during an employee’s scheduled work hours. The designated employee should be trained to determine impairment and qualified to complete observation reports.  Employers may use a third-party contractor.
  • Use a uniform “Reasonable Suspicion” Observation Report to document the behavior, physical signs, and supporting evidence of the suspected impairment.
  • Establish a Standard Operating Procedure for completing the report.
  • Use a cognitive impairment test, a scientifically valid, objective, consistently repeatable, standardized automated test of an employee’s impairment, and/or an ocular scan as physical signs or evidence to establish reasonable suspicion of cannabis use or impairment at work.

Employers in the state of New Jersey may want to review the new guidance with their legal team to understand how this might impact their current drug testing policies and procedures.

The City of Dallas Considers Fair Chance Hiring for Private Employers

The Dallas City Council is considering joining the growing ban the box movement with the introduction of a Fair Chance Hiring ordinance.  As introduced, this law would apply to certain private employers in Dallas, TX.

According to the proposed law, the term employer includes:

  • “A person, company, corporation, firm, labor organization or association that employs at least 15 individuals who worked in the city each working day for 20 or more calendar weeks in the current or preceding calendar year. The term includes an agency acting on behalf of an employer.  The term also includes the city.  The term does not include:
    • The United States government, any of its departments or agencies, or any corporation wholly owned by it;
    • The government of the State of Texas or any of its departments, agencies, or political subdivisions; or
    • An organization that is exempt from taxation under Section 501(c) of the Internal Revenue Code”

The proposed law states that “An employer commits a violation if the employer inquires about an applicant’s criminal history on an initial job application.”

Like other local “Ban-the-Box” style laws, the proposed law includes penalties for violations. The Dallas law proposes that an employer that violates the law the first time may be issued a written warning. This warning would also notify the employer that a civil penalty may be imposed for subsequent violations. Following a written warning, if that employer violates the law again, they would be subject to a civil penalty not to exceed $500 for each sequential offense.

One of the Dallas City Council members, Chad West, owns a car wash business. In an interview with NBC Dallas they said, “As a business owner I’m still going to want to know before I hire somebody if they have a criminal history or not and what that is., I think I have a duty to my company, my investors, my customers, and other employees to just vet everybody out.”

Some of the other council members even have personal reasons for standing behind this proposed law. Adam Bazaldua, Chairman of the City Council Quality of Life Committee that’s considering the law, said his father got a job 37 years ago, even though he was a felon. “If that chance had not been afforded to my dad with his past and time at Huntsville, my family would probably not have had the opportunities that I had,” Bazaldua said. Council member Omar Narvaez, who supports the change, has a younger brother that is a convicted felon. Narvaez said, “I used to work for a company as a hiring manager and in that company, we were told if somebody checked that box it was automatically put into a ‘no’ pile.”

There are also exceptions within the proposed law:

  • It would not apply to a situation in which a candidate might be disqualified based on the individual’s criminal history under a federal, state, or local law, pursuant to a federal, state, or local agency or commission rule or regulation, or compliance with a legally mandated insurance or bond requirement.
  • It would not limit an employer’s right to make a hiring decision for any lawful reason, including the decision that a candidate is unsuitable for the job based on an assessment of that applicant’s criminal history.
  • It would not limit an employer’s right to post a list of criminal convictions that may disqualify an applicant from employment.

This Dallas Fair Chance Act is in the early stages of review and remains in committee for consideration. The legislative process may change portions of this law. Verified Credentials will continue to monitor and provide updates on this pending ordinance.

California Governor Vetoes Bill That Would Remove Public Record Search Restrictions

Challenges to court record access in California continue to be a critical issue for the background screening industry and the employers that rely on those records.

The issue began with the May 2021 California Appellate court decision of All of Us or None v. Hamrick. In the decision, the court held that:

“…allowing the public to search an electronic [court] index by inputting an individual’s known date of birth or driver’s license number constitutes a violation of [California court rules].”

This ruling has had a drastic impact on what personal identifiers can be used to search a court’s electronic index.

State lawmakers heard the outcry from the Professional Background Screening Association (PBSA), background screeners, and others. SB-1262 was introduced and states:

“The clerk of the superior court shall keep indexes to ensure ready reference to any action or proceeding filed in the court. There shall be separate indexes of plaintiffs and defendants in civil actions and defendants in criminal actions… Publicly accessible electronic indexes of defendants in criminal cases shall permit searches and filtering of results based on a defendant’s driver’s license number or date of birth, or both.”

On May 24, 2022, the bill passed the state Senate with a vote of 37-0. The state Assembly had little opposition to the bill, passing it with a 53-9 vote on August 31, 2022. It was then sent to California Governor Gavin Newsome for signature.

Governor Newsome vetoed the bill on September 29, 2022. At this time, the vetoed bill has been returned to the California Senate. The PBSA stated they,

“…will be regrouping with allies to determine what our next and best possible options are at this stage.”

Verified Credentials will continue to monitor the progress in California and provide updates. Employers may want to work with their legal team to determine the best approach for screening candidates with a history in the state of California.

California Bill Removing Public Record Search Restrictions Moves Forward

A bill passed by the California legislature could mean good news for those that use public records from the state’s court system. Reliable access to these records is essential for background check companies.

In June 2022,  we discussed legislation introduced after a recent California appellate court decision, All of Us or None v. Hamrick. In its ruling, the California Court of Appeals held that “…allowing the public to search an electronic index by inputting an individual’s known date of birth or driver’s license number constitutes a violation of [California court rules].” This ruling has dramatically impacted what personally identifiable information can be used to search a court’s electronic index.

After the court ruling, SB-1262 was introduced.  SB-1262 states, “The clerk of the superior court shall keep indexes to ensure ready reference to any action or proceeding filed in the court. There shall be separate indexes of plaintiffs and defendants in civil actions and defendants in criminal actions… Publicly accessible electronic indexes of defendants in criminal cases shall permit searches and filtering of results based on a defendant’s driver’s license number or date of birth, or both.”

In addition to being able to search court records by name, this will allow background screening providers that perform criminal record checks in California to search by date of birth and driver’s license number. This will help make sure that the records returned belong to the candidate.

Progress Forward

On August 31, 2022, the California Assembly passed SB-1262. The bill was delivered to the Governor for his signature on September 13, 2022. The governor has until September 29 to sign or veto the bill.  If enacted, the bill will go into effect on January 1, 2023.

Employers that the current limited public record access may impact are encouraged to voice support for the bill by the Professional Background Screening Association (PBSA).

Public Input Requested on Form I-9 Flexibility

The Department of Homeland Security (DHS) is asking for public comments on Form I-9 proposed rulemaking.

The impact of COVID-19 on how companies do business is ongoing. Hybrid and remote workforces may result in certain I-9 flexibility policies eventually being here to stay.

Long History of Extensions to I-9 Compliance Flexibility

During the pandemic, DHS introduced temporary I-9 compliance flexibility.  First started in March 2020, DHS allowed temporary compliance flexibility for specific I-9 physical presence requirements. This flexibility has continued to be extended, with the most recent announcement extending compliance flexibility to October 31, 2022.

Last year the DHS asked for public comments related to I-9 document examination practices.

Proposed Rule Could Make Flexibility a Fixture

The DHS has recently announced another Notice of Proposed Rulemaking, stating:

“This proposed rule would create a framework under which the Secretary of Homeland Security could authorize alternatives to the current requirement that employers (or authorized representatives acting on an employer’s behalf) physically examine documentation presented by individuals seeking to establish identity and employment authorization for the purposes of the Form I-9, Employment Eligibility Verification. Such alternatives could be put in place through a pilot program, for some or all employers (or authorized representatives acting on an employer’s behalf), or as a temporary measure.”

There’s still time for employers to have their voice heard. A comment period for the proposed rule is open.

The DHS recognizes that more employers may have adopted telework and remote work arrangements since the start of the pandemic.

Considering these technological advances and new work arrangements, the DHS is exploring alternative options, including making some pandemic-related flexibilities permanent to examine Form I-9 identity and employment authorization documents. The rule, however, would not create an alternative process by itself but would formalize the authority of the Secretary of Homeland Security to extend flexibilities, provide alternative options, or conduct a pilot program further to evaluate alternative procedures for some or all employers.

You have the chance to share your voice. Interested parties can view the proposed rule and leave comments by visiting regulations.gov by October 17, 2022.

The DHS does stress that:

All interested parties participate in this rulemaking by submitting data, views, comments, and arguments on all aspects of this proposed rule. Comments providing the most assistance to DHS will reference a specific portion of the proposed rule, explain the reason for any recommended change, and include the data, information, or authority that supports the recommended change.”

California Passes Cannabis Use Anti-discrimination Law

New York state and Washington, D.C. are two jurisdictions that introduced protections for cannabis users in the last year. Both have introduced or passed laws that limit employment decisions based on a candidate’s cannabis use. And the state of California is up next.

The California Governor recently signed AB-2188, the state’s version of a cannabis use anti-discrimination bill. It will take effect on January 1, 2024.

California’s law takes a unique approach. The law specifies restrictions based on certain cannabis metabolites. As passed, the bill restricts what actions employers can take action based on a drug test that shows the presence of nonpsychoactive cannabis metabolites.

According to language in the bill, tetrahydrocannabinol (THC) is the chemical compound in cannabis that can indicate impairment and cause psychoactive effects. After tetrahydrocannabinol is metabolized, it is stored in the body as a nonpsychoactive cannabis metabolite. If only the metabolites are present, they do not indicate impairment, but rather prior cannabis use. Most positive tests for marijuana fall in this category.

Under the law, it is unlawful for an employer to discriminate against a person in hiring, termination, any term or condition of employment, or general penalization based on:

  • The person’s use of cannabis off the job and away from the workplace. This does not prohibit an employer from making certain employment decisions based on drug screening that does not screen for nonpsychoactive cannabis metabolites.
  • A drug screen that has found a person to have nonpsychoactive cannabis metabolites in their hair, blood, urine, or other bodily fluids.

The law doesn’t permit employees to possess, use, or be impaired by cannabis while on the job.  It also does not affect an employer’s rights or obligations to maintain a drug and alcohol-free workplace as specified in state law or any other employer rights or obligations under federal law or regulation. Likewise, the law does not apply to building and construction employees hired for positions requiring a federal background investigation or security clearance. Additionally, the law does not preempt federal law requiring drug testing for controlled substances as a condition of employment. Those may include jobs with employers that receive federal funding, federal licensing-related benefits, or those that enter into a federal contract.

The new cannabis use protections sweeping the country has some employers making changes to their drug testing strategy. Laws change frequently and this may be a topic to consider monitoring. Employers should work with their legal teams to understand how these laws may impact them. Likewise, they may want to consult with an attorney before changing what they currently do.

Tragedy Highlights Importance of Employment Background Checks

Safety is one of the top reasons employers use pre-employment background checks, as it is essential to protecting employees, customers, and the public. A tragic situation, and the trials that followed, highlight the potential dangers of incomplete background checks.

According to the complaint, in 2018, cable company Charter Communications, LLC (“Charter/Spectrum”) hired Roy James Holden, Jr. as a field technician. While employed with Charter/Spectrum, Holden displayed increasingly troubling behavior such as:

  • Documented sexual harassment of female co-workers
  • Disregard for safety, health, or hygiene
  • Evidence of severe stress over financial and family problems
  • Extreme changes in behavior

Holden’s troubling behavior included a pattern of stealing credit cards and personal information from elderly female customers. He used what he took to purchase things for himself. Despite the problematic behavior, Holden continued to enter the homes of Charter/Spectrum customers.

On December 11, 2019, Holden was called to do work in the home of Betty Jo McClain Thomas. The next day he arrived at her house again in his Charter/Spectrum van. Holden told Ms. Thomas that additional work needed to be done and was allowed entry. Once inside, Holden attacked Ms. Thomas and stole her credit cards, something he had done with previous customers. Ms. Thomas died of her injuries.

Legal Ramifications for the Employer

During legal proceedings, the Charter/Spectrum HR Director admitted that the company did not conduct employment verification for Holden as required by company policy. The HR Director said if they had verified Holden’s job history, it would have revealed information showing dishonesty. Background screening would have disqualified Holden from the technician position.

The complaint alleged, among other things, that Charter/Spectrum acted negligently by:

  • Hiring Holden
  • Failing to properly investigate Holden’s criminal history, mental health history, and prior employment history
  • Failing to supervise and monitor Holden properly
  • The reckless employment of Holden
  • Failing to implement and enforce safety policies and procedures

On July 26, 2022, a Dallas County jury awarded $7 billion in punitive damages to Ms. Thomas’ family. In addition, Charter/Spectrum was ordered to pay 90% of the $375,000,000 in compensatory damages to the family. This tragedy serves as a reminder to employers of the importance of comprehensive screening of candidates. Employers may want to review their current checks with their legal team.

Lawsuit Alleges Violations of Disclosure and Authorization Requirements

Background check disclosure and authorization requirements can often be a source of confusion for employers, and violations may lead to potential lawsuits. Another lawsuit has been filed alleging violations of federal and state disclosure and authorization requirements – Nunley v. Cardinal Logistics Management Corporation.

Basics of the Complaint

Tony Nunley first filed a complaint against Cardinal on May 11, 2022, in the Superior Court of the State of California, County of San Bernadino. The case was removed to the US District Court for the Central District of California on July 19. The filing removing the case to federal court states that, among other things, Nunley claimed the company’s background check disclosure and authorization forms violated three laws:

  • Fair Credit Reporting Act (FCRA)
  • California Investigative Consumer Reporting Agencies Act (ICRAA)
  • California Consumer Credit Reporting Agencies Act (CCRAA)

In the initial complaint, Nunley claims that Cardinal “at times, obtained and used information in consumer reports to conduct background checks on prospective and existing employees which failed to comply with the requirements under the FCRA.” The alleged violations of the FCRA include, among other things:

  • Disclosure forms with extra information. Specifically, the complaint claims Cardinal’s disclosure included contact details on a screening company that Cardinal did not use for Nunley’s background report. Forms also allegedly had state-specific disclosure requirements.
  • Difficult to read and understand disclosure forms. Nunley claims the documents were provided in small font and were included in a lengthy package of employment-related documents filled with dense text.
  • Failure to obtain proper authorization. Nunley claims that Cardinal obtained background checks without permission. Sometimes this was the result of screening after the authorization expired. Nunley also claims that Cardinal provided a release form for third parties to release information directly to Cardinal, which “is different from an authorization… to procure a consumer report.”
  • Inclusion of liability waivers. According to Nunley, Cardinal’s disclosure included a liability waiver.
  • Failure to provide notifications. The complaint alleges that Cardinal failed to give a summary of certain rights under federal law, among other things.

The complaint also alleges that Cardinal failed to provide a clear and conspicuous disclosure in writing before procuring background reports, as required by ICRAA. Additionally, the complaint alleges that Cardinal obtained “consumer credit reports,” as that term is defined by California law, and failed to provide a disclosure that contained all the requirements of the CCRAA.

The proposed class for this case includes all current, former, and prospective employees of Cardinal who applied for a job with Cardinal and whose background check was performed up to 5 years before the complaint filing.

According to the federal court filing:

“Based on the claims alleged in the Complaint in the State Court Action, Plaintiff seeks, on behalf of himself and the putative class, an assortment of alleged damages, including, but not limited to, punitive damages, statutory penalties, declaratory relief, interest, attorney fees, and costs.”

This lawsuit is still pending. Verified Credentials will attempt to provide updates as they become available.

D.C. Works to Protect Employees Who Use Marijuana

The use of cannabis across the United States has become less controversial. Laws have been shifting from prohibition to medical purposes to recreational use. And it appears that widespread acceptance of cannabis use is becoming a trend. Some jurisdictions are even starting to enact employment protections for cannabis users.

One example is Washington, D.C.’s “Cannabis Employment Protections Act of 2022”. Mayor Muriel Bowser signed the Act on July 13, 2022. The new law will prohibit employers from refusing to hire, terminate employment, suspend, fail to promote, demote or penalize an individual based on:

  • Individual cannabis use.
  • Medical cannabis as a patient.
  • The presence of cannabinoid metabolites in a drug test specimen if there are no other impairment indicators according to the law.

Under the new law, employers must notify employees of their rights, whether they have designated the employee’s position as “safety sensitive,” and protocols for any drug or alcohol testing the employer performs. Employers should give this notice to each new employee upon hire and current employees within 60 days of the law’s enactment. Employers should provide the required information on an annual basis as well.

Room for Employer Action

Although this new law does restrict employers in some respects, there are areas where the action is allowed. Employers are not in violation of the law if they make certain employment decisions based on cannabis use if:

  • The role is “safety sensitive,” as defined in the law.
  • A federal statute, regulation, contract, or funding agreement requires it.
  • The employee used, consumed, possessed, stored, delivered, transferred, displayed, transported, sold, purchased, or grew cannabis at the workplace or while on the job, unless otherwise permitted by Washington DC law.
  • Notwithstanding Washington DC law, if the employee is impaired by marijuana use while working. The law defines impairment as manifesting:

“…specific articulable symptoms while working… that substantially decrease or lessen the employee’s performance of the duties or tasks of the employee’s job position, or such specific articulable symptoms interfere with an employer’s obligations to provide a safe and healthy workplace as required by D.C. or federal law.”

This law intends to protect employees. However, it also spells out what it is not meant to do. The regulations should not be seen as a requirement for employers to permit or accommodate the use, consumption, possession, storage, delivery, transfer, display, transportation, sale, purchase, or growing of cannabis at the employee’s workplace or while on the job. Additionally, the law does not create or eliminate causes of action for any person against an employer for the injury, loss, or liability, eliminate causes of action otherwise available, or create a safe harbor or provide employers immunity from a lawsuit.

The new law also isn’t meant to prohibit employers from adopting a reasonable drug-free workplace or employment policy that:

  • Requires post-accident or reasonable suspicion drug testing of employees. Policies can also require drug testing employees in “safety sensitive” positions.
  • Is necessary to comply with federal law, including requirements from federal contracts or funding agreements.
  • Prohibits the use, consumption, possession, storage, delivery, transfer, display, transportation, sale, purchase, or growing of cannabis in the workplace or on the job.
  • Prohibits employee impairment from cannabis use while on the job or during work hours.

While D.C.’s new law is not law yet, it’s well on the way. The signed law was sent to the U.S. House of Representatives and U.S. Senate for 60 days before becoming effective. During this period, Congress may enact a joint resolution disapproving the Act. A joint resolution prevents the law from enactment if the President approves it. But if the President supports no joint resolution, the Bill finally becomes a Law and is assigned a law number.

Employers in Washington, D.C., may want to review the Act to prepare for its enactment. Similar laws could affect others outside the D.C. area. Consult your legal team to understand how this might require a change to your current drug testing policy.

Automatic Record Sealing Law Signed in Colorado

In March, we discussed Colorado SB22-099. As introduced, it was aimed to automatically seal certain conviction and civil judgment records in the state. Governor signed the bill on May 31, 2022, with some changes from the original language. The new restrictions will officially become law on August 10, 2022.

According to the legislative summary, among other things,

“The bill extends… automatic sealing to all offenses, including civil infractions, that allow the defendant to petition the court for sealing criminal justice records that are not subject to the victims’ rights act.”

Crimes listed under the Colorado Victims’ Right Act are excluded from automatic sealing. However, with some exceptions, records that will automatically be unavailable will include:

  • Convictions eligible for sealing based on state law.
  • Civil infractions four years past final disposition.
  • Petty offenses and misdemeanors seven years past final disposition.
  • Eligible felonies ten years past the later of the final disposition or release from supervision.

The law also amends the Colorado Consumer Reporting Act. Consumer reporting agencies, including background check providers like Verified Credentials, will not be able to access and report certain criminal records. This includes sealed, expunged, and records that didn’t result in a conviction.

This could impact employers who complete background checks on candidates that may have spent time in Colorado. To begin, it could remove certain records for those that live in Colorado. But it could also include candidates that worked, went to school, or even traveled to the state.

Updated Sealing Process in Signed Law

The original bill language included details on the process for sealing records. The final, signed copy had a few updates on how officials should proceed.

1. That state court administrator is required to compile a list of convictions eligible for automatic sealing. Beginning July 1, 2024, the state court administrator will provide a quarterly report of eligible drug convictions, misdemeanors, and petty offenses. A quarterly list of eligible felony convictions is required beginning on July 1, 2025.

The state court administrator’s reports will not include:

  • Cases without a final disposition on all charges.
  • Eligible intervening judgments or convictions pending their wait period.

2. Eligible conviction records move on to each district attorney. The chief district judge of each receives the list of eligible civil judgments to seal with the final list of all eligible convictions.

3. Each district attorney has 45 days to file a notice with the originating court to object to sealing individual records. Eligible objections must be provided and may include:

  • A condition of the plea agreement was not to have the record sealed.
  • The defendant has a pending criminal charge.
  • There is an intervening conviction.
  • The record is ineligible for sealing.
  • For certain felonies, if the district attorney believes the public interest and safety outweigh the privacy or consequences to the defendant. This situation requires the district attorney to provide supporting documentation to the court. The defendant must be notified by the court and provided a hearing on the matter.

4. The state court administrator removes records the district attorney objects to from the list. They send a list of the remaining eligible convictions to each chief district judge for sealing orders. Once the chief district judge receives the final list, records must be sealed within 14 days.

While the law isn’t effective yet, it will proceed unless a referendum is filed. Employers that hire candidates with connections to Colorado may want to review the law with their legal counsel to determine how this might impact them.

Court Affirms That Conditional Offer Doesn’t Mean Employed

Job candidates can spend a lot of time and resources in pursuing employment – everything from preparing resumes, completing job applications, and traveling to interviews. A recent Ninth Circuit Court of Appeals decision, Johnson v. Winco Foods, addressed when a candidate might be considered an employee during the hiring process. The case looked explicitly at whether employers must reimburse candidates for travel expenses and time related to drug testing.

Like many employers in the U.S., the WinCo Foods supermarket chain extends contingent offers of employment during their hiring process. Typically, a hiring manager calls the job applicant with details like the job title, pay, and location. WinCo’s “Verbal Contingent Job Offer Talking Points” guide for managers includes the statement that, “as part of your contingent job offer with WinCo Foods, we will be conducting a pre-employment background check and drug test on you.” After the candidate accepts the conditions, they receive instructions to complete the necessary checks.

Candidates Seek Reimbursement

WinCo Foods covers the cost of pre-employment checks, including drug tests. However, WinCo candidate Alfred Johnson filed a class-action lawsuit against the company claiming employees should be compensated for the time and expense of getting the required drug test. Johnson made two claims:

1. Candidates with contingent job offers are employees based on California case law.

Johnson claimed he was an employee when he took his drug test. Established California case law looks at how much control an employer has over an individual to determine if there is an employment relationship. According to Johnson, Winco Foods “exerted sufficient control” over the testing process. The employer not only required the test, but determined where it would take place, the date and time of the test, and what substances it would test.

While WinCo Foods doesn’t dispute that they controlled the drug test process, the court rejected Johnson’s claim that he was an employee at the time of his test.

“In this case, the class members were not performing work for an employer when they took the preemployment drug test; they were instead applying for the job, and they were not yet employees.”

2. Under California law, drug tests are a “condition subsequent” to hire.

Johnson claimed that based on “contract theory,” the drug test is a condition subsequent, meaning that the employment relationship was formed before the drug test. He said WinCo Foods could terminate the employment relationship if someone failed their drug test.

WinCo countered this claim stating that the drug test is a condition precedent. The applicant is not hired at the time of a contingent offer. In fact, the employment contract is not enforceable until the applicant successfully passes the drug test. The court agreed with the employer that there was no subsequent condition because plaintiffs were not hired until they established they were qualified. The court held that the class members did not become employees until they satisfied the condition of passing the drug test.

Employers may want to review the decision with trusted legal counsel to determine how this may impact their hiring processes.

Ban the Box Heads to New Sector: Higher Education

Ban the Box laws have become increasingly commonplace for employers to follow. The state of Delaware is expanding who can or cannot ask about criminal history to the classroom – the higher education classroom. According to the bill’s synopsis,

“Research shows that questions about criminal conviction history deter individuals from applying to an institution and increase the likelihood of rejection, with a disproportionate effect on people of color. This Act promotes diversity by prohibiting academic institutions from inquiring into an applicant’s criminal conviction history, with limited exceptions for inquiries into certain types of offenses such as stalking and sexual assault.”

While the governor hasn’t yet signed, the Delaware Senate passed the “Ban the Box Act” (SB13) on June 30, 2022. The bill will become effective immediately when it is signed. The law impacts “academic institutions,” defined by the state as “an institution of postsecondary education receiving State funds or a private institution of postsecondary education with campuses physically located in Delaware.”

The bill will limit when academic institutions can request criminal history information from potential students when it is signed into law. With some exceptions,

“An academic institution shall not inquire about an applicant’s criminal history on an initial application form or at any time during the admissions process prior to the institution’s decision relative to the prospective student’s acceptance for admission.”

Schools can immediately ask about certain offenses on the application. Specifically, this includes asking about stalking or sexual assault convictions. However, if an academic institution denies admission based on a stalking or sexual assault conviction, the academic institution must notify the applicant. The applicant may then appeal the decision to the entity within the institution that considers the institution’s disciplinary matters.

Specific Exceptions

Schools do have some flexibility to ask about an applicant’s criminal conviction history for certain exceptions. Under the law, academic institutions may ask about an applicant’s criminal conviction history for the following reasons:

  • After acceptance, to offer the student counseling and other support services.
  • To make decisions on the student’s participation in campus life and to determine if the institution will limit campus life participation after the student has been accepted for admission.
  • If, after admission, the student enrolls in a program where criminal history must be reported to a state agency for licensing or certification, such as teaching. An academic institution cannot deny a student from admission or continuation in a program that requires an occupational license or teaching certificate based solely on a criminal conviction history. The academic institution must provide counseling relative to the licensing or certificate to the student so that the student can make an informed decision about whether they should pursue such a program.
  • If information pertaining to criminal conviction history is on an application that is designed by a national application service, tailored to a specific degree program, and used by schools in multiple states.

If the academic institution decides to use criminal conviction history information to determine campus life participation or to offer counseling or support services after the student has been accepted for admission, it must consider:

  • The nature and seriousness of the crime.
  • Whether the crime has a direct relationship with the student’s participation.
  • How much time has passed since the crime.
  • The student’s age when they committed the crime.
  • Evidence of the student’s rehabilitation.

Academic institutions with formal policies related to student criminal history checks must make them available on their public website. Those that do not have a formal policy must still include a statement about how they comply with this law on their public website.

The legal landscape surrounding ban the box laws has seen rapid changes. Employers may wish to review this, as well as other ban-the-box laws, to determine what impacts they may have on their hiring procedures.

Colorado Bill Impacts Using Juvenile Court Records

Businesses and individuals continue to deal with the economic impact of the COVID-19 pandemic. Governments all over the country found quick fixes for immediate needs. But now, some work to deal with the long-term effects. On May 6, 2022, the Colorado legislature passed a bill to help with some recovery in the state’s economy.

Colorado House Bill 22-1383 points to juvenile offender job skills training and opportunities as one solution to assist with pandemic recovery. The bill states, “Juvenile adjudications can negatively impact employment opportunities, and it is an important expansion of state policy that juvenile records do not impact employment decisions.” To limit these issues, the bill will restrict using juvenile criminal records for employment decisions in most cases.

Pending Restrictions in Colorado

The bill language explains the need for the law further, stating,

“In creating employment opportunities for youth with involvement in the juvenile justice system, this act seeks to minimize hiring discrimination based on an applicant’s past involvement in the juvenile justice system.”

Once in effect, it will be illegal for most public and private employers to ask candidates or employees, of any age, to disclose certain information related to juvenile criminal history, with some exceptions. This includes details pertaining to juveniles:

  • Arrests
  • Detentions
  • Diversion plans
  • Supervision
  • Adjudication
  • Dispositions

Candidates or employees of any age are not required to disclose juvenile criminal history, even if an employer asks.

Exclusions to the restrictions are allowed for screening candidates or employees that have direct contact with vulnerable individuals, or the screening of candidates or employees required by licensed childcare centers pursuant to state law.

Additionally, suppose a candidate or employee has been adjudicated for committing a delinquent act in a juvenile proceeding. In that case, that information cannot be used as a basis for denying employment or taking adverse action against an otherwise-qualified candidate.

The Governor signed the bill on June 3, 2022. If a referendum petition is not filed, the law will be effective on August 9, 2022, 90 days after the state’s legislator adjourned. Employers that hire in Colorado may want to review the bill language with their legal counsel to understand how it may impact their background check process.

Pending California Legislation Could Remove Public Record Search Restrictions

Reliable background checks require a variety of information. Searches of court records within a court’s electronic index, like those used for some criminal history checks, rely on being able to search by and access various personally identifiable information (PII). In general, PII is data that can help match a record to an individual and might include:

  • Name & Aliases
  • Address
  • Date of Birth
  • Driver’s License Number
  • Social Security Number
  • And Much More

In many cases, a public record search requires being able to search by multiple PII to confirm if a record matches a candidate. Without being able to search with all the necessary information, background reports may not include all potential records for a candidate. And that means employers could be left with incomplete information on their candidates and employees.

California Case Results in Statewide PII Search Restrictions

A recent California appellate court decision, All of Us or None v. Hamrick, interpreted Rule 2.507 of the California Rules of Court in a way that has had a far-reaching impact on what PII can be used to search a court’s electronic index. The court rule states,

The following information must be excluded from a court’s electronic calendar, index, and register of actions:

(1) Social security number;
(2) Any financial information;
(3) Arrest warrant information;
(4) Search warrant information;
(5) Victim information;
(6) Witness information;
(7) Ethnicity;
(8) Age;
(9) Gender;
(10) Government-issued identification card numbers (i.e., military);
(11) Driver’s license number; and
(12) Date of birth.

The Superior Court of California, Riverside County maintained a public access that allowed individuals to search the court’s electronic index of cases. Users could search the Riverside Court’s public access and obtain court records and data linked to a personally identified criminal defendant by inputting a known date of birth or driver’s license number.

In May 2021, the California Court of Appeals decided that the Riverside Court’s search function by date of birth or driver’s license violated California court rules. The California Appellate Court held that “…allowing the public to search an electronic index by inputting an individual’s known date of birth or driver’s license number constitutes a violation of Rule 2.507.”

The Professional Background Screening Association (PBSA), among others, has stressed the potential impact of the court’s ruling. In response to this decision, some courts across the state started to remove “date of birth” and “driver’s license number” as a search field, if they were previously available. As the PBSA notes, “This causes a severe impact on background screening because the only identifier remaining on the publicly available record is often name, which is not enough to conclude that the record is about any specific person.”

Pending Legislation Could Make a Change

On May 24, 2022, the California Senate passed a bill that could require consistent indexing of court records across the state. SB-1262 states:

“Existing law requires a clerk of the superior court to keep an index of any action or proceeding filed in the court. Existing law requires a separate index for plaintiffs and defendants in civil actions and for defendants in criminal actions.

This bill would require publicly accessible electronic indexes of defendants in criminal cases to permit searches and filtering of results based on a defendant’s driver’s license number or date of birth, or both.”

If passed, this law would allow background screening companies that conduct criminal record checks in California to search court records by date of birth or driver’s license number in addition to a candidate’s name to help ensure that records returned belong to the candidate.

The bill is now with the California Assembly for consideration. Concerned employers can voice their support of this pending legislation with resources provided by the PBSA. Verified Credentials will continue to monitor the progress of this bill and provide updates as they are available.

EEOC & DOJ Cautions Against Using AI to Make Employment Decisions

Artificial intelligence or AI continues to be a hot topic in HR. Seamless, touch-free use of complex hiring technologies has been the mark of a faster way to source and onboard candidates. Automating parts of the hiring process to boost efficiency is evident in:

  • Applicant tracking systems
  • HR information systems
  • Online assessments
  • And more

Innovative workflow tools are one thing, but AI-automated hiring is a more controversial concept. Two of the most HR-influential federal agencies encourage caution when taking advantage of automated hiring decisions – specifically using AI.

On May 12, 2022, the U.S. Equal Employment Opportunity Commission (EEOC) and the Department of Justice (DOJ) each made announcements. They gave guidance on using AI and other software tools to make employment decisions.

According to the EEOC press release,

“Employers increasingly use AI and other software tools to help them select new employees, monitor performance, and determine pay or promotions. Employers may give computer-based tests to applicants or use computer software to score applicants’ resumes. Many of these tools use algorithms or AI. These tools may result in unlawful discrimination against people with disabilities in violation of the Americans with Disabilities Act (ADA).”

EEOC Guidance for Algorithmic Decision-making

The EEOC released a technical assistance document called “The Americans with Disabilities Act and the Use of Software, Algorithms, and Artificial Intelligence to Assess Job Applicants and Employees.” It points out common ways an employer’s algorithmic decision-making tool could violate the ADA.

The employer relies on an algorithmic decision-making tool that could “screen out” an individual with a disability. This can happen even if the individual is able to do the job with reasonable accommodation.

Results from assessment tools could “screen out” job applicants or employees if a disability:

  • Lowers performance on an assessment
  • Reduces accuracy of the assessment
  • Creates special circumstances that employers need to consider
  • Prevents participation in an assessment

The employer uses an algorithmic decision-making tool that violates the ADA’s restrictions on disability-related inquiries and medical examinations.

According to the EEOC guidance, if an employer fails to offer a “reasonable accommodation” that is necessary for a fair and accurate rating of the job applicant or employee by the algorithm, that could also violate the ADA.

DOJ Guidance for Algorithmic Decision-making

In its guidance, “Algorithms, Artificial Intelligence, and Disability Discrimination in Hiring,” the DOJ notes that:

“The Americans with Disabilities Act (ADA) is a federal law that seeks to remove barriers for people with disabilities in everyday activities, including employment. The ADA applies to all parts of employment, including how an employer selects, tests, or promotes employees. An employer who chooses to use a hiring technology must ensure that its use does not cause unlawful discrimination on the basis of disability… When designing or choosing hiring technologies, employers must consider how their tools could impact different disabilities.”

How does the DOJ guidance affect access to jobs? The DOJ echoes the EEOC, focusing on assessment technologies and reasonable accommodations. According to the DOJ, employers may potentially avoid disability discrimination when using hiring technologies by:

1. Focusing on relevance to the job. Testing technology must evaluate job skills, not disabilities. Screening applicants with tests, assessments, or games should reveal only relevant skills and abilities. If a test or technology disqualifies a qualified applicant because of a disability, an employer should instead use an accessible test or make other adjustments to their hiring process.

2. Providing reasonable accommodations to those with disabilities. The ADA requires employers provide reasonable accommodations to individuals with disabilities, including during the hiring process, unless doing so would cause undue hardship for the employer. The DOJ notes that some examples of accommodations could include allowing the applicant to use assistive equipment, modifying policies, or making other changes to the hiring process or the job. Employers that use hiring and assessment technologies may need to adopt practices to ensure applicants receive reasonable accommodations, if required. This could include telling applicants about the technology used for evaluation. By providing enough information, applicants can decide to seek a reasonable accommodation. Employers may also want to provide clear procedures to request an accommodation and ensure that asking for an accommodation doesn’t hurt an applicant’s chance of getting the job.

“Algorithmic tools should not stand as a barrier for people with disabilities seeking access to jobs,” said Assistant Attorney General Kristen Clarke for the DOJ’s Civil Rights Division. “This guidance will help the public understand how an employer’s use of such tools may violate the Americans with Disabilities Act, so that people with disabilities know their rights and employers can take action to avoid discrimination.”

Have questions about using AI and automation for employment decisions? You may consider reviewing candidate-facing tools and assessments with your attorney to get additional guidance on how to avoid disability discrimination.

FCRA Violation Case Dismissed for Lack of Standing

The Fair Credit Report Act (FCRA) is central to the use of background checks for employment. For better or worse, the FCRA is often made clearer through court interpretations of the law when ruling on lawsuits alleging FCRA violations. If you have been reading our updates for a while, you may notice we dig into court rulings, opinions, and judgments related to the FCRA. What about dismissed cases?

The Eighth Circuit has recently dismissed Schumacher v.  S.C. Data Center, Inc., a putative class action that alleged multiple FCRA violations, due to lack of standing.

What is Standing?

For a federal court to have jurisdiction to hear a case, a party must establish three elements to meet the “irreducible constitutional minimum” of standing:

1. Facts demonstrating “an injury in fact;”

2. That is fairly traceable to the challenged conduct of the defendant; and

3. That is likely to be redressed by a favorable judicial decision.

An “injury in fact” must be “concrete and particularized” and “actual or imminent,” not conjectural or hypothetical. According to the Supreme Court, “concreteness” contemplates traditional harm, such as physical harm, monetary harm, or various intangible harms such as reputational harm.

If a party can’t establish all three elements of standing, the case cannot be heard in federal court.

A Revoked Job Offer

Ria Schumacher applied for employment with defendant S.C. Data Center, Inc. in August 2015. As part of the application process, she responded “no” to a question asking whether she had ever been convicted of a felony. After Schumacher completed the company’s pre-employment tests, she was the job.

S.C. Data asked her to complete an Authorization for Release of Information form. The form notified Schumacher that S.C. Data intended to use Sterling Infosystems to conduct a criminal background search that “will only be conducted once an offer of employment has been made.”

After S.C. Data reviewed the report and one week before Schumacher’s scheduled start date, S.C. Data notified Schumacher that it was withdrawing the conditional offer of employment and that a confirmation letter would follow.

Schumacher was not given an opportunity to correct or explain the results in the report before the employment offer was withdrawn and received the letter one week after her start date had passed. It included a copy of her background report and a description of her rights under the FCRA. Schumacher did not dispute the accuracy of the report.

Three Alleged FCRA Violations & Court Response

Schumacher filed a lawsuit against S.C. Data. She alleges the company committed three violations of the FCRA.

1. “Adverse Action Claim” (violation of 15 U.S.C. § 1681b(b)(3)(A)) – Taking adverse action based on the background report before giving the candidate a copy.

The undisputed facts established that S.C. Data offered Schumacher a job, arranged a start date, and rescinded the job offer before she was given a chance to see or respond to the background report. S.C. Data also relied on information in the report when it took adverse employment action. Notably, Schumacher did not claim the report was inaccurate. Under the FCRA, Schumacher had the right to receive a copy of her background report before the adverse action was taken.

What the Court ruled: It noted there are competing views among courts on whether an employer’s failure to comply with the FCRA by providing a copy of the consumer report prior to taking adverse employment action is a bare procedural violation or conduct that causes intangible harm sufficient to meet minimum requirements for standing. After evaluating those views, it concluded that neither the text of the FCRA nor the legislative history provides support for Schumacher’s claim that she has both a right to receive a copy of her report and to discuss directly with the employer accurate but negative information within the report prior to the employer taking adverse action.   Even though she may have demonstrated a violation of the law, she did not demonstrate an “injury in fact.”


2. “Improper Disclosure Claim” (violation of 15 U.S.C. § 1681b(b)(2)(A)(i)) – Obtaining a background check without a FCRA-compliant disclosure.

Schumacher claimed that S.C. Data’s disclosure form was not clear and conspicuous because most of the text in the disclosure was no larger than six-point font, constituting “eye-straining text” within “a host of non-disclosure language.”

Next, Schumacher claimed the disclosure did not conform to FCRA requirements because it did not use the words “consumer report” and did not tell her that a consumer report may be procured for employment purposes. However, it expressly informed her that a criminal background search would be conducted only after an offer of employment was made.

Finally, Schumacher claimed the disclosure included extraneous information, including:

    • A statement regarding the consequences for failing to provide accurate or complete information.
    • Information applicable only to candidates applying for motor carrier positions.
    • Release of liability provisions.
    • Report dispute process details.

Notably, Schumacher did not allege any claim of harm, either tangible or intangible.

What the Court ruled: Without something more, a technical violation of the disclosure statute is insufficient to confer standing. Schumacher failed to establish that she suffered a concrete injury due to the improper disclosure. As a result, she lacks standing to pursue her improper disclosure claim.


3. “Failure to Authorize Claim” (violation of 15 U.S.C. § 1681b(b)(2)(A)(ii)) – Obtaining more information than what was disclosed in the authorization.

Schumacher claims that she only authorized a criminal background check, not a consumer report.  She did, however, explicitly authorize the screening company to conduct a “criminal background search” and “make an independent investigation of [her] criminal records maintained by public and private organizations.”  It was undisputed that the “Background Screening Report” returned criminal history information and information contained in a national sex offender search. It did not contain information about Schumacher’s credit history or worthiness, personal characteristics, or other information that is typically included in a comprehensive consumer report.

What the Court ruled: The authorization and report fit within the FCRA’s broad definition of consumer report even though they may not have used the term “consumer report.” Under these facts, the search was FCRA compliant. Moreover, because the search did not plainly fall outside the scope of the authorization, Schumacher failed to plead an intangible injury to her privacy sufficient to confer standing.


Schumacher’s case lacked the minimum requirements to establish standing, and as a result, the Court dismissed the case for lack of jurisdiction. This case turned on its facts in a circuit that required the plaintiff to prove an injury in fact. As the Schumacher Court noted, other circuits consider a technical violation of the statute (i.e., taking an adverse employment action without providing the required consumer report, to be an actual harm sufficient to confer standing).

While this is one case that ended in the employer’s favor, others often don’t. Employers may want to consult their legal team to review their background check documents and adverse action process for FCRA compliance.

Questions Around “Willfulness” in FCRA Violations

Employer missteps during the background check process can result in legal action. As we’ve seen before, this often is the result of allegedly failing to meet the Fair Credit Reporting Act’s (FCRA) disclosure and authorization requirements, including:

1. Not providing the applicant/employee with a clear and conspicuous disclosure, in a document that consists solely of the disclosure, that the employer may obtain a Consumer Report about them for employment purposes.

2. Not getting the applicant/employee’s written authorization for the employer to obtain the Consumer Report.

We have previously covered examples where employers are accused of not meeting the FCRA disclosure and authorization requirements. Amazon, Fred Meyer, and DMG Mori are just some examples of companies that have faced lawsuits alleging violations of the FCRA. Here is an example of an extraneous information case.

Hebert v. Barnes & Noble, Inc.

A California Appeals Court recently reversed a trial court decision that had granted summary judgment in favor of bookstore chain Barnes & Noble, Inc. The appellate court held that there is a triable issue of whether the employer willfully violated the FCRA’s standalone disclosure requirement.

The case stems from job candidate Vicki Hebert. She applied to work for the company in 2018. During her application process, Hebert received a disclosure. Additionally, she gave Barnes & Noble authorization to complete a background check. The disclosure form included a paragraph that stated:

“Please note: Nothing contained herein should be construed as legal advice or guidance. Employers should consult their own counsel about their compliance responsibilities under the FCRA and applicable state law. First Advantage expressly disclaims any warranties or responsibility, or damages associated with or arising out of information provided herein.”

Hebert alleged that this paragraph is extraneous information in violation of the FCRA.

Trial Court Judgment

Barnes & Noble moved for summary judgment. It claimed that Hebert could not establish one of the elements of her case, namely that Barnes & Noble’s violation of the standalone disclosure requirement was willful. It argued that the extraneous language in the disclosure was the result of an inadvertent drafting error that occurred while it was revising the disclosure to ensure FCRA compliance. In addition, it argued that it reasonably and in good faith relied on the advice of outside legal counsel when it included the extraneous language in its disclosure, thus precluding a finding of willfulness.

The trial court agreed with the employer and granted Barnes & Noble’s motion for summary judgment. The trial court held that Hebert couldn’t establish willfulness because “the facts here show[ed] nothing more than a mistake.”

Hebert Appeals

A California appellate court overturned the trial court’s ruling.

“Unlike the trial court, we conclude Hebert adduced sufficient evidence from which a reasonable jury could indeed find that Barnes & Noble’s alleged FCRA violation was willful.”

The court relied upon the following in reaching its holding:

  • The inclusion of extraneous language in Barnes & Noble’s disclosure form and its o “ostensible violation” of the FCRA’s “unambiguous prohibition” indicates willfulness under established case law.
  • There is evidence that at least one Barnes & Noble employee was aware that the disclosure included extraneous language.
  • A reasonable jury could find that Barnes & Noble acted recklessly by delegating all of its FCRA compliance responsibilities to a human resources employee who, by his own admission, knew very little about the FCRA. And, under the law, reckless statutory violations constitute willfulness under the FCRA.
  • A reasonable jury could conclude Barnes & Noble took excessive risks by allowing its final disclosure form to go live without any form of review or oversight.
  • A reasonable jury could find that Barnes & Noble was reckless by failing to provide adequate FCRA training to its employees, who bore responsibility for ensuring its FCRA compliance.
  • Barnes & Noble’s continuous use of the allegedly problematic disclosure for nearly two years suggests it lacked a proactive monitoring system to ensure its disclosure was FCRA compliant. A reasonable jury could rely upon the absence of such a monitoring system to constitute recklessness.

Collectively, the appellate court held the evidence is sufficient to allow a jury to decide whether Barnes & Noble’s purported FCRA violation is “willful.”  It remanded the case back to the district court, where Barnes & Noble will have to defend against the claims. Notably, Hebert is attempting to sue on behalf of all individuals for who Barnes & Noble procured a consumer report in the preceding five years.

This case introduces additional analysis on what “willfulness” means related to FCRA violations. That is important because a finding of willfulness allows a plaintiff to recover statutory damages ranging from $100 to $1,000, punitive damages, and attorney’s fees and costs. An affected consumer would only be entitled to actual damages for a negligent violation. Employers may want to review their documents with their legal teams to ensure they are meeting their legal requirements.

I-9 Compliance Flexibility Continues Through Fall 2022

Employers have had the benefit of two years of I-9 compliance flexibility. And that’s not changing anytime soon. The Department of Homeland Security (DHS) has extended the updated flexibilities until October 31, 2022.

In March 2020, DHS temporarily deferred the physical presence requirements of the Employment Eligibility Verification (Form I-9). This policy only applied to employers and workplaces that were operating remotely. It has not applied to employers who have employees physically present at a work location.

The I-9 compliance flexibility permits employers to inspect their employees’ documents through video, fax, or email rather than just in person. Employers are still required to obtain, check, and retain copies of the documents within three business days.

Employers that take advantage of the I-9 compliance flexibility should take note that when normal operations resume, employees onboarded using the remote inspection option must report to the employer within three business days so that their documents can be inspected and verified in person. Employers that use this flexibility must also provide written documentation of their remote onboarding and telework policies for each employee.

The I-9 compliance flexibility was intended to be a temporary policy in response to the COVID-19 pandemic. The last extension of I-9 compliance flexibility was set to expire on May 1, 2022. Due to the continuation of the COVID-19 pandemic, DHS announced another extension.

Even though compliance flexibility is ongoing, the announcement notes that,

“Employers are encouraged to begin, at their discretion, the in-person verification of identity and employment eligibility documentation for employees who were hired on or after March 20, 2020, and who presented such documents for remote inspection in reliance on the flexibilities first announced in March 2020.”

Employers may want to continue to monitor updates from DHS on the I-9 Central.

Temporary List B Expiration Flexibility Ends May 1, 2022

After over two years, the Department of Human Services (DHS) announced an end to the temporary ID document flexibility for Form I-9. The temporary policy has been in effect since May 1, 2020, when COVID-19 began to impact document renewals. The interim rule allows employers to collect expired List B documents for identification. List B documents include driver’s license, government-issued ID card, military card, and more.

“…identity documents found in List B set to expire on or after March 1, 2020, and not otherwise extended by the issuing authority, may be treated the same as if the employee presented a valid receipt for an acceptable document for Form I-9 purposes.”

Employers have until May 1 to implement procedures to change back to the permanent DHS policy. At that time, employers will no longer be allowed to accept expired List B documents. But that’s not all the policy change requires. Employers must collect updated documentation from anyone that gave an expired List B document between March 1, 2020, and April 30, 2022.

To update the record, for employees that are still employed, employers must:

  • Have the employee provide an unexpired document that establishes identity. Acceptable documentation includes the renewed List B document, a different List B document, or a document from List A.
  • Enter the document title, issuing authority, number, and expiration date in the “Additional Information” field in Section 2.
  • Initial and date the record change.

No action is required for employees that are no longer employed. If the List B document was automatically extended by the issuing authority so that it was unexpired when presented, no further action is required.

Currently, this is the only temporary I-9 policy that DHS is ending. This week, the DHS again extended other temporary guidelines resulting from COVID-19 until October 31, 2022. Employers may want to monitor I-9 Central for updates to necessary Form I-9 requirements.

A Case of Potential Violations of City & State Requirements in NYC

New York City has some of the country’s most complex laws for employers to follow. A case filed in the Southern District of New York alleges potential violations of city and state requirements.

The federal Fair Credit Reporting Act (FCRA) may be the most well-known law impacting how employers use background checks. But those that hire in the Big Apple might have to follow more than just the FCRA and may need to pay attention to city employment laws like the New York City Fair Chance Act (FCA), part of the New York City Human Rights Law (NYCHRL). There are also New York state-specific laws, including the New York State Fair Credit Reporting Act.

Allegations against Hersha Hospitality Management and Others

Like FedEx, another employer in New York City is accused of violating the NYC FCA and other allegations. In December 2021, Steven Anthony Sanchez applied for a bellperson job at the Moxy NYC Downtown hotel, a hotel owned and operated by Hersha Hospitality Management, LP, one of the Defendants named in the complaint. He was hired, but he found another person assigned to his duties shortly after beginning the role.

The general manager explained to Sanchez, “Sorry, we found out that you have a criminal background, so we’re going to let you go.” Sanchez also received an “Adverse Action Notice” around the same time.

The hotel sent Sanchez a copy of his background check showing a conviction history, and he doesn’t dispute that he received it. However, the complaint alleges that the Defendants never provided a detailed explanation of why his conviction disqualified him. Further, Sanchez claims that the Defendants never provided a copy of Article 23-A of the New York Correction Law, detailing the circumstances under which an employer may reject an applicant based on conviction history.

Based on the complaint, Sanchez claims the Defendants violated the New York City Fair Chance Act in three ways:

  • Defendants completed a background check on Sanchez before extending a conditional offer of employment.
  • Defendants took adverse action without a written copy of Article 23-A analysis (required by N.Y.C. Admin Code § 8-107(11-a)(b)(ii)).
  • Defendants took adverse action without allowing a reasonable amount of time, of not less than least three days, to respond to the Article 23-A analysis (required by N.Y.C. Admin Code § 8-107(11-a)(b)(ii)).

In addition, Sanchez alleges the employer violated the state-level New York Fair Credit Reporting Act (“NY FCRA”). He claims the Defendants completed consumer reports without providing copies of Article 23-A of the New York Correction Law.

Class Action Proposed

Sanchez’s complaint proposes two classes for the case:

1. The NYCHRL class

“All individuals with criminal records who, during the applicable limitations period, applied for employment at any New York City hotel [owned by Defendants] and were either denied employment or terminated after Defendants conducted a background check… without first receiving (a) a conditional offer of employment and/or (b) Defendant’s Article 23-A analysis and a reasonable opportunity to respond to it.”

2. The NY FCRA class

“All individuals with criminal records who, during the applicable limitations period, applied for employment at any New York City hotel [owned by Defendants] and (a) were denied employment or terminated by Defendants, (b) had consumer reports requested about them by Defendants, and were not provided with a copy of Article 23-A of the Correction Law.”

This case is currently pending. Employers that hire in New York City or state may want to monitor the case with their legal team to understand how it may impact their practices.

Higher Court Reviews Employment Discrimination Case

We previously covered the appellate court decision in Cree, Inc. v. LIRC. After our last post, the case continued to move through the legal process. The Supreme Court of Wisconsin has now weighed in on the case.

An Overview of the Cree Case

In July 2015, Cree, Inc. offered job applicant Derrick Palmer an Applications Specialist job subject to a standard background check. The background check revealed the candidate’s convictions stemming from a 2012 domestic violence incident. The candidate pled no contest to several serious crimes, including:

  • Two counts of felony strangulation and suffocation
  • Four counts of misdemeanor battery
  • One count of fourth-degree sexual assault
  • One count of criminal damage to property

Cree referred the matter to its general counsel. They reviewed Palmer’s conviction record using a matrix that categorized each candidate’s convictions as a “fail.” Cree then rescinded its offer of employment.

Evaluating What Relates to the Job

According to the Supreme Court holding, Wisconsin law generally prohibits an employer from discriminating against prospective employees based on one’s conviction record. However, there is an exception to the general rule.

“It is not employment discrimination because of conviction record . . . [if] the individual has been convicted of any felony, misdemeanor, or other offense the circumstances of which substantially relate to the circumstances of the particular job.”

This is known as the “substantial relationship test.” However, the employer bears the burden to take advantage of the exception in these cases. They must show that the conviction substantially relates to the circumstances of the job.

Conflicting Decisions Across Courts

Palmer filed a complaint with the Wisconsin Department of Workforce Development’s Equal Rights Division (ERD). It alleged that Cree discriminated against him based on his record, violating the Wisconsin Fair Employment Act. The ERD found probable cause to hold a hearing on the merits before an administrative law judge.

Administrative Law Judge Decision

The judge determined that Palmer’s convictions substantially related to the Applications Specialist position. Under Wisconsin law (Wis. Stat. § 111.335(3)(a)1.,8), Cree did not discriminate against Palmer when it rescinded its job offer.

Labor and Industry Review Commission Decision

Palmer appealed the ALJ’s findings to the Labor and Industry Review Commission (LIRC). LIRC reversed. They held that,

“Where assault or battery convictions stem from personal relationships and the crimes are committed at home, it cannot necessarily be assumed that the individual is likely to engage in the same conduct with co-workers or customers at the work place.”

Based on the domestic nature of Palmer’s crimes, LIRC concluded that they did not substantially relate to the Applications Specialist job.

Circuit Court & Court of Appeals Decisions

The circuit court reversed the LIRC’s decision. The court of appeals then reversed again. The appellate court upheld the LIRC’s decision that Cree failed to meet its burden. They held that the employer didn’t show a substantial relationship between Palmer’s convictions and the job.

The Case Moves to the Supreme Court

The Wisconsin Supreme Court reviewed the LIRC’s decision. In doing so, the Supreme Court noted that “the plain language of the substantial relationship test requires that the employer show that the facts, events, and conditions surrounding the convicted offense materially relate to the facts, events, and conditions surrounding the job.”

The WI Supreme Court held, “To summarize, we apply the substantial relationship test to a domestic violence conviction the same way we would to any other conviction.”

“[W]e must look beyond any immaterial identity between circumstances——such as the domestic context of the offense or an intimate relationship with the victim——and instead examine the circumstances material to fostering criminal activity. The material circumstances are those that exist in the workplace that present opportunities for recidivism given the character traits revealed by the circumstances of a domestic violence conviction.”

The court held, “Based on the evidence Cree submitted, the circumstances of Palmer’s convictions substantially relate to the Applications Specialist position…”

“The candidate’s willingness to use violence to exert power and control over others substantially relates to the independent and interpersonal nature of a pre and post sales job like the Applications Specialist position.”

Further, “the absence of regular supervision creates opportunities for violent encounters.”

The court also noted, “several other factors also weigh in favor of finding a substantial relationship.”

  • “…the seriousness of Palmer’s convictions would force Cree to assume the risk of Palmer repeating his conduct and threatening the safety of employees, customers, and the public.”
  • “…the recentness of Palmer’s convictions—a scant two years—eliminates any favorable inference of a long-dormant conviction record.
  • “…Palmer’s emerging pattern of domestic violence convictions further highlight his recidivism risk.”

Employers may want to review the court’s decision with their legal counsel and assess how this might impact their hiring decisions.

Lowe’s Accused of FCRA Violations

Home improvement store Lowe’s is accused of violating the FCRA. The claims are part of a putative class action suit filed in the Western District of North Carolina.

According to the complaint, Lowe’s offered Anthony Hale a sales position contingent on a background check in March 2020. After the offer, Hale stopped applying for jobs and even turned down a job at another home improvement store. But in April, Hale received a text message from a Lowe’s employee that his background check didn’t pass. Hale responded to the message requesting a copy of his report. He alleges that he never received a copy of the report or the FCRA summary of rights.  The complaint alleges that:

Simply put, Defendant violated [the Fair Credit Reporting Act (“FCRA”)] because, before taking adverse action against the Plaintiff, it did not provide him either with a copy of his consumer report or with the summary of rights required under [the FCRA].

As we have previously discussed, the FCRA has specific requirements for employers who are thinking about taking adverse action against a candidate based, in whole or in part, on information from a background report.  This includes, but is not limited to, providing the candidate with a copy of both the background report and written summary of rights under the FCRA before taking adverse action against the candidate.

Complaint Proposes a Class

Hale’s complaint aims to highlight more than just his experience. The complaint outlines a proposed class of others impacted by Lowe’s background check procedures. The proposed class includes all consumers in the United States who over the last five years:

  • Were subject to a background check provided to Lowe’s;
  • Based, in whole or in part, on information contained in the reports, were entered into Lowe’s computer system with a code indicating they were “ineligible” for hire or continued employment; and
  • Didn’t receive a copy of their report or FCRA summary of rights from Lowe’s at least five business days before they were entered in Lowe’s computer system with a code indicating they were ineligible for hire or continued employment.

Multiple Lawsuits May Show Willfulness

The complaint claims that Defendant’s alleged violations of the FCRA were willful.

The foregoing violations were willful. Defendant acted in deliberate or reckless disregard of its obligations and the rights of Plaintiff and other Pre-Adverse Action Class Members under [the FCRA].

The complaint states that Lowe’s previously settled a nationwide class claim for alleged violations of the FCRA and should be on “heightened notice of [the FCRA’s] requirements as a result of the… litigation”.

This is the second time Defendant has been sued for nearly identical violations of the FCRA, making its FCRA violations alleged herein particularly egregious and willful.

Hale’s complaint states that this, among other things, is proof the company’s alleged violations of the FCRA were “willful.”

This case was only filed in February 2022 and is still in its early stages.  At this point in the litigation, the allegations against Lowe’s remain only allegations. Verified Credentials will continue to monitor the case status and release updates.

California Case Offers Insight on Potential Cost of Violating State Reporting Law

It may be apparent to employers that any violation of employment law can result in consequences. Often, the law spells out potential penalties. That’s the case with the California Investigative Consumer Reporting Agencies Act (ICRAA).

An Overview of ICRAA Damages

California employers, and employers hiring people who live or work in the state, may want to work with trusted legal counsel to determine if their background screening programs need to comply with both California and federal law. What’s at risk? Employers that violate California’s ICRAA may be required to provide monetary damages.

According to state law, the cost to employers that fail to meet California’s requirements may include:

  • Actual damages sustained by the candidate due to the employer’s violation or, except in the case of class actions, $10,000, whichever is greater.
  • The costs paid by the candidate to enforce the employer’s liability. This includes the costs of the legal action and reasonable attorney’s fees as determined by the Court.
  • Punitive damages determined by the Court if the employer’s actions are found grossly negligent or willful.

How the Court May Interpret the Law

A recent order by the US District Court in the Southern District of California in the case of Garcia v. Quest Group Consulting, LLC looks at how the courts may calculate statutory damages under ICRAA.

According to the Court’s order, Garcia initially filed a claim in California state court alleging, among other things, violations of ICRAA. The court order states that Garcia’s complaint alleges that the Defendants employed Garcia as an hourly temp worker in California. Garcia further alleged that Defendants procured an investigative consumer report on her after requiring her to sign a deficient disclosure document, violating ICRAA. She seeks only the ICRAA statutory damages.

The Defendants removed the case from state court to federal court, arguing that the statutory damages Garcia is seeking exceed the required $75,000 threshold for hearing the case in federal court based on diversity jurisdiction.  Garcia filed a motion with the US District Court to remand the case back to state court.

The Defendants claimed that Garcia is seeking ICRAA damages of $120,000, plus attorney fees, because Garcia alleges the Defendants violated several sections of ICRAA.

Garcia claimed that her statutory damages should be lower, below the required threshold for hearing the case in federal court. She argued that she is only entitled to one statutory penalty because the Defendants only performed one background check. Garcia claimed that the law applies the penalty per defendant, not per violation.

The US District Court ruled in favor of Garcia and remanded the case back to state court. The ruling held that “…the ICRAA penalty applies per ‘investigative consumer report’” and not for individual alleged violations.

This case gives employers a peek at how courts may calculate ICRAA statutory damages in the future. Employers should talk with their legal team to understand how this could impact them.

Colorado Introduces Bill to Automatically Seal Some Records

You may be familiar with sealed criminal records. Generally, sealed records are not accessible with a public record search.

Pending legislation in Colorado may create an express path to sealing records. On February 1, 2022, Colorado SB22-099 was introduced in the Colorado legislature. If passed, the bill would create a way to seal some criminal and civil records automatically.

According to the legislative summary, among other things, “The bill extends… automatic sealing to all of the offenses, including civil infractions, that allow the defendant to petition the court for sealing criminal justice records that are not subject to the victims’ rights act.”

Let’s get to know more about what is happening with this pending legislation.

What Would and Would Not Be Automatically Sealable

The bill expands the list of automatically sealable conviction records to include, with some exceptions:

  • Conviction records that are eligible for sealing under state law
  • Civil infractions, if four years have passed since final disposition
  • Petty offenses or misdemeanor convictions, if seven years have passed since final disposition
  • Eligible felonies, if ten years have passed since final disposition or the release of a defendant from supervision, whichever is later.

The bill excludes convictions for crimes listed under the Colorado Victims’ Rights Act. This exception prevents certain serious crimes from becoming eligible for the automatic sealing process, such as murder, assault, kidnapping, aggravated robbery, child abuse, and more.

Proposed Path to Sealing a Record

The state would manage the process of automatically sealing eligible conviction records. According to SB22-099, the path to automatically seal a conviction record would include:

1. The state court administrator generates a quarterly report of conviction records eligible for automatic sealing.

2. The list is forwarded to the Colorado Bureau of Investigation (“Bureau”). The Bureau is required to compare the list with criminal history reports. The Bureau will then remove any convictions from the list which cannot be compared to criminal history reports due to insufficient identification validation.  Additionally, the Bureau is required to remove convictions from the list if the defendant has any intervening convictions during the “waiting period” from the final disposition of the conviction record until the record is eligible to be automatically sealed for each level of offense.

3. Validated and eligible conviction records move onto each district attorney, who may object to sealing the conviction record if the defendant has a pending criminal charge or intervening conviction.

4. The state court administrator then would remove conviction records objected to by the district attorney and compile a revised list of conviction records eligible for automatic sealing. The final list would then be sent to the chief judge for each judicial district.

5. The courts of each judicial district then would enter sealing orders for the listed conviction records within 14 days of receiving the final list.

Other Implications of Bill

Among other implications, the bill would amend the Colorado Consumer Reporting Act. If passed, among additional proposed amendments:

  • “A user of any consumer report or investigative consumer report shall disclose or provide a copy of the report, including the name and contact information of the consumer reporting agency, to the consumer to whom it relates if adverse action has been taken or is being contemplated based, in whole or in part, on the report.”
  • “Consumer reporting agencies are prohibited from reporting records of charges or indictments pending trial, sealed records, expunged records, and records that did not result in conviction.”

Please see the bill for full details of proposed exceptions and procedures of automatically sealing records.

If passed, the Colorado law could impact what criminal records will be reportable in Colorado. Verified Credentials will continue to watch legislative proceedings regarding Colorado SB22-099. Keep an eye out for updates in the coming months.

Lawsuit for Employment Discrimination Allegations Moves Forward

A proposed class-action lawsuit filed against Whole Foods Market Group, Inc., Amazon.com, Inc., and Cornucopia Logistics, LLC (“Defendants”) is one of the latest lawsuits alleging that employers violated applicable laws during the hiring process. We have previously discussed other recent lawsuits filed against employers, including an additional case against Amazon for allegations of background check disclosure violations.

Former Job Candidate Turned Plaintiff

Let’s look at what led up to this lawsuit against the Defendants.

According to a recent court order in response to Defendant’s Motion to Dismiss the amended complaint, plaintiff Henry Franklin served nearly 25 years in prison for a second-degree murder conviction. The State released him on parole in 2018. In April 2019, Franklin applied for a delivery worker job with Cornucopia Logistics, a vendor that has a contract with Amazon to provide delivery workers for its subsidiary, Whole Foods.

The court order notes that Franklin contends that the job application, which Cornucopia posted on a recruiting website, stated that applicants must consent to a background check as part of the job application process. Amazon and Whole Foods claim Franklin answered “no” when asked whether he had any prior convictions as part of his application. Further, the court order also notes:

“Shortly after Franklin completed the online application, he alleges that he received a letter from Amazon informing him that Amazon had performed a background check and would make a final decision on his application in ten days…Franklin alleges that he received another letter from Amazon two weeks later, informing him that his application had been denied “in whole or in part” due to information contained in the Background Report.”

According to the court order, Franklin filed a first amended complaint in September 2020 alleging that all the Defendants unlawfully discriminated against him based on his criminal history ad that they used discriminatory screening policies and practices in violation of:

  • New York State Human Rights Law (NSHRL)
  • New York City Human Rights Law (NYCHRL)
  • New York State Fair Credit Reporting Act (NYFCRA)

Employers Seek Motion to Dismiss

The defendants moved to dismiss the lawsuit based on Failure to State a Claim.

The Court disagreed and denied the Defendant’s Motion to Dismiss. The Court held that Franklin stated a claim of employment discrimination under the NYSHRL. According to the Court’s order, “Section 296(15) of NYSHRL makes it unlawful to deny employment to an individual ‘by reason of his having been convicted of one or more criminal offenses . . .’ when such denial is in violation of the provisions of [Article 23-A] of the N.Y. Correction Law” unless one of two exceptions applies:

1. There is a “direct relationship” between the criminal offense and the employment sought.

2. Hiring someone with a criminal background poses an “unreasonable risk” to the public.

The court notes that NYSHRL does not prohibit the consideration of an applicant’s criminal history in deciding whether to hire a person but can only consider the applicant’s criminal history if the employer can show that one (or both) of the exceptions apply. According to the Court, Franklin’s complaint sufficiently alleged why neither exception applies in this case.

“As the position at issue involved driving to deliver groceries, and, as Franklin asserts, he was never convicted of a vehicular offense, the Court finds that Franklin has adequately alleged that there is no direct relationship between his conviction and his fitness or ability to deliver Whole Foods groceries.”

Additionally, the Court found that Franklin adequately pled that the “unreasonable risk” to persons or property exception does not apply. According to the Court order, “The Court is sympathetic to Defendants’ likely position that they do not want a convicted murderer delivering groceries to their customers’ homes. But considering the allegations in the complaint in the light most favorable to Franklin, he has adequately alleged that he is rehabilitated and no longer poses a threat to the public.”

Nearly 25 years have passed between his conviction and the job application. Franklin contended that because the State of New York paroled him, the State had determined that he did not pose a risk to anyone’s property, safety, or welfare. Franklin also contended that he is older now, and individuals who know him can attest to his rehabilitation. “Taken together, those allegations support the conclusion that Franklin has adequately pled that the public risk exception does not apply to him.”

The Court held that because Franklin has adequately alleged that neither of the NYSHRL exceptions applies, he has adequately alleged facts that can infer a minimal inference of discriminatory motivation. Further, the Court states that because Franklin has stated a claim under the NYSHRL, he has necessarily stated a claim under NYCHRL.

The Court also addressed the Defendants’ argument that the Defendants had a legitimate, nondiscriminatory reason for not hiring him because Franklin lied on his application. The Court held that alleged legitimate reasons for an adverse employment action cannot be considered on a motion to dismiss – but can only be considered on a motion for summary judgment or trial.

The Case Moves Forward

At this stage in litigation, the case is allowed to proceed. Even though the Court denied the motion to dismiss, it did not rule on the merits of the Plaintiff’s arguments. Instead, the Court held that the Plaintiff sufficiently stated a claim for the case to continue. The case is being referred to a mediation program as the next stage in litigation.

We will continue to monitor the status of this case. Employers should consult their legal team for details on how this case may impact them.



Get to Know Massachusetts’ CORI

CORI, or Criminal Offender Record Information, is a specific term defined by Massachusetts law. Those that conduct background checks in Massachusetts might already know about CORI. For those that don’t, CORI isn’t the name of the person in charge of records in the state. CORI, with some exceptions, is generally defined as records and data in any form compiled by a Massachusetts criminal justice agency that concerns an identifiable individual and relates to the nature or disposition of:

  • Criminal charges
  • Arrests
  • Pre-trial & other judicial proceedings
  • Previous hearings conducted, according to state law, where the defendant was detained before trial or released with certain conditions
  • Sentencing, incarceration, rehabilitation, and release

The Massachusetts Department of Criminal Justice Information Services (DCJIS) maintains an online database of certain CORI information, known as iCORI.  Generally, employers that obtain such information from the DCJIS have certain obligations. However, even employers who don’t get criminal record information from iCORI may have specific responsibilities.

Are you running criminal history checks in Massachusetts? According to Massachusetts regulations, a person or entity that conducts five or more criminal background investigations annually must maintain a written CORI policy. That obligation applies, whether you get information from DCJIS or another source. Policies must include all provisions from the DCJIS Model CORI Policy. Verified Credentials maintains the DCJIS Model CORI policy in the Resource Library. There, clients can find other sample documents to reference too. These are helpful resources for employers as they create their policies.

Massachusetts Adverse Action Requirements

Massachusetts regulations also state that employers that choose to take adverse action against an employment applicant, volunteer applicant, employee, or volunteer based on CORI or any other criminal history information must do the following (before taking adverse action):

  • Comply with applicable federal and state laws and regulations.
  • Notify the candidate in person or by telephone, fax, or correspondence (either electronic or “hard copy”) of the potential adverse action.
  • Give the candidate a copy of their CORI or other criminal history information.
  • Identify the source of the CORI or criminal history information.
  • Provide the candidate with a copy of their CORI Policy.
  • Identify the information within the candidate’s CORI or criminal history information used as the basis for the potential adverse action decision.
  • Give the candidate an opportunity to dispute the accuracy of the CORI or other criminal history information.
  • If CORI is considered a part of a potential adverse action, provide a copy of the DCJIS CORI correction process located in the Resource Library.
  • Document all steps taken to comply with Massachusetts regulations.

Employers may wish to review the Massachusetts laws and regulations with their legal teams to determine how they may apply to them.

A Deeper Look at Investigative Consumer Reports

Employers hoping to learn detailed information about their candidates may want to read on. You may know the Fair Credit Reporting Act (FCRA) definition of a “Consumer Report.” But are you familiar with the FCRA’s definition of “Investigative Consumer Reports” and the specific requirements that go along with them?

The FCRA defines an Investigative Consumer Report as:

a Consumer Report (or any part within a Consumer Report), with some exceptions, in which information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer, or any others who may be acquainted with the consumer or who may have knowledge about such items.

Want to dig deeper about what is (and what is not) an Investigative Consumer Report? Looking at regulatory interpretations of the FCRA can help.

In 2011, the Federal Trade Commission (FTC) released a report containing a summary of FCRA interpretations. The summary, “40 Years of Experience with the Fair Credit Reporting Act” (the “40 Years Report”), can be a practical tool to help provide guidance and other interpretations of the FCRA. While the summary can be helpful, the FTC does caution that “The Staff Summary does not have the force or effect of regulations or statutory provisions” and that “These summary statements of the law… should not be used as a substitute for the statutory text.”

“Personal Interviews” Inform Investigative Consumer Reports

So, what does the FTC’s summary say about Investigative Consumer Reports?  The FTC’s interpretation of the definition of an Investigative Consumer Report notes that “An ‘Investigative Consumer Report’ is a type of ‘Consumer Report’ that includes information obtained through personal interviews with the consumer’s neighbors, friends, associates, or others. If communication does not fall within the definition of ‘Consumer Report,’ however, it will not be an ‘Investigative Consumer Report.’”

What’s critical to the definition of an Investigative Consumer Report is that information must be obtained through a “personal interview.”

According to the FTC, “’Personal interviews’ include interviews with a neighbor, friend, or associate of the consumer conducted by mail, telephone or electronic means, as well as in person.” This information all has something in common – it’s an interview with a third person. The term may lead employers to believe that any interview fits this category. The FTC notes that if the report contains only information obtained from the candidate, it would not be considered an Investigative Consumer Report. The information was not collected through personal interviews with third persons.

Employers may wonder if the definition includes checking a candidate’s references or job history. The FTC provides guidance on this, too.  According to the FTC’s interpretation, a discussion between a Consumer Reporting Agency and a candidate’s previous employer to verify facts reported on an employment application (such as periods of employment, job titles, and salary information) is not an interview and is not an Investigative Consumer Report. The FTC does clarify that obtaining information from a former employer beyond “fact-checking” could constitute an interview and be considered an Investigative Consumer Report. This could include, but is not limited to, asking a candidate’s former employer about:

  • Discipline actions against the candidate
  • Termination reasons
  • Evaluations of the candidate’s job performance

Keep in mind that a report that contains both information obtained from personal interviews and information not obtained through other, non-interview background checks could still be considered an Investigative Consumer Report. The FTC notes:

“A report that is obtained by personal interviews with the consumer’s neighbors, friends, associates or others does not lose its status as an ‘investigative consumer report’ if it also contains non-investigative information (such as a credit report), because the definition includes reports, a ‘portion’ of which are investigative reports.”

Unique Disclosure Requirements for Investigative Consumer Reports

Employers that obtain Investigative Consumer Reports must provide their candidates with a specific disclosure to get the report. The disclosure must:

  • Clearly and accurately disclose to the employee or applicant in writing that it may obtain an Investigative Consumer Report, including information from the referenced personal interviews as to their character, general reputation, personal characteristics, and mode of living.
  • Be provided to the candidate within three days of requesting the report.
  • Include a statement that the candidate has the right to request additional disclosures and a written summary of rights, as provided by the FCRA.

It may be tempting for employers to combine all disclosures into one. You may want to think again if this is something you are considering. Verified Credentials recently discussed litigation involving one employer that took this route.

The FTC detailed additional interpretations of the FCRA in the 40 Years Report. Check out the resource for disclosure and delivery requirements.

We offer sample disclosures, including a sample investigative consumer report disclosure, to clients in their account’s Resource Library to reference as they create their disclosure documents. Employers should work with their legal counsel to determine if their disclosures meet their specific requirements.

Federal “Fair Chance Act” Now in Effect

“Ban the Box” style laws are a trend that has grown exponentially over the last decade. In fact, we have covered several laws in multiple jurisdictions, including laws in Louisiana, Philadelphia, Illinois, and more.

The federal government’s own Ban the Box law, the federal “Fair Chance Act,” has recently come into effect. Initially signed into law on December 20, 2019, as part of the National Defense Authorization Act for Fiscal Year 2020, the Fair Chance Act became effective on December 20, 2021.

With some exceptions, the Fair Chance Act prohibits federal executive agencies from inquiring about an applicant’s criminal history record information before making a conditional offer (i.e., an employment offer conditioned on the results of a criminal history inquiry). The Fair Chance Act states that:

[A]n employee of an agency may not request, in oral or written form (including through the Declaration for Federal Employment (Office of Personnel Management Optional Form 306 or any similar successor form, the USAJOBS internet website, or any other electronic means) that an applicant for an appointment to a position in the civil service disclose criminal history record information regarding the applicant before the appointing authority extends a conditional offer to the applicant.

In addition to executive agencies, this prohibition applies to all legislative and judicial agencies.

The Fair Chance Act restrictions on criminal history record information inquiries also extend to federal contractors, with some exceptions. According to the law:

[A]s a condition of receiving a Federal contract and receiving payments under such contract … the contractor may not verbally, or through written form, request the disclosure of criminal history record information regarding an applicant for a position related to work under such contract before the contractor extends a conditional offer to the applicant.

To read the full text of the Fair Chance Act, click here (the link will take you to the National Defense Authorization Act for Fiscal Year 2020. The Fair Chance Act starts at Section 1121 on Page 408).

While the applicability of the Fair Chance Act is limited to certain federal agencies and entities that have contracts with the federal government, you may still want to review the law with your legal counsel to determine any impacts it may have on you.

Clarity on FCRA Disclosure and Certification Requirements May Be Coming

Employers often struggle with the many disclosure and certification requirements of the Fair Credit Reporting Act (FCRA). A recently introduced bill in the US House of Representatives aims to provide new clarity on these requirements. On November 23, 2021, US Representatives Madeline Dean and Trey Hollingsworth introduced HR 6067, the Clarity in Consumer Disclosures Act of 2021. According to a press release by Representative Dean,

“[t]his legislation will direct the Consumer Financial Protection Bureau (CFPB) to create clear, plain-language model forms for consumer reports so that employers can fulfill the requirements of FCRA.”

Model Documents and Language to Help Employers

If passed, the CFPB must, within one year of enactment of the law, develop and issue:

  • Model language for the certifications a user of background reports must provide to their background report provider before obtaining a background report for employment purposes.
  • Model disclosure and authorization forms that comply with the FCRA’s background report disclosure and authorization requirements.
  • A model consent form and language that can be used in any form for a consumer to provide the required consent if a background report contains certain medical information if that report is to be used for employment purposes or in connection with a credit transaction.
  • A model form and language that can be included in any forms that can be used to provide a consumer with the required disclosures and notifications before obtaining an “investigative consumer report,” as the FCRA defines that term.
  • Model language for the required certifications a user must provide to their background report provider before obtaining an “investigative consumer report”.
  • Model language of certification regarding the permissible purpose for a user to obtain a background report, as required by 15 USC § 1681b(f)(2) and 15 USC § 1681e(a).

Formatting and Components of Model Forms and Model Language

To the extent possible, the CFPB must attempt to create a single, integrated model form that complies with all of the above requirements. Any model forms or language developed by the CFPB must be in plain language understandable by an average reader, cannot contain citations to law, and must be easily adapted based on specific consumer reports.

Additionally, the CFPB must consider state laws when developing the model forms. Among other things, it must:

  • Review state laws regulating background reports.
  • Develop the model FCRA forms to satisfy any state law requirements substantially similar to FCRA requirements.

The bill includes a safe harbor provision, providing added protections to employers that use background reports for employment purposes. Employers that use a model form developed by the CFPB intended to meet a specific FCRA requirement and that accurately reflects the practices of that employer are considered to be compliant with that requirement.

Verified Credentials will continue to monitor the progress of this bill and release updates as it moves forward.

New York City Moves to Restrict Use of Certain Automated Hiring Technologies

Technology could help simplify the hiring process, including adopting new technologies to manage your candidate pool, run video interviews, and conduct background checks. Employers may use automation to process candidates and hire faster. A New York City law will soon place restrictions on the use of certain automation tools during the hiring process.

Restrictions on Certain HR Technology Tools

The New York City council enacted the new law on December 11, 2021. The law goes into effect on January 23, 2022. Once effective, employers and employment agencies (“employers”) cannot use “automated employment decision tools” unless they meet certain conditions. An automated employment decision tool includes any computational process, with some exceptions, that issues simplified output, including a score, classification, or recommendation to assist or replace discretionary decision making for employment decisions through:

  • Machine learning
  • Statistical modeling
  • Data analytics
  • Artificial intelligence

The city seeks to remove situations where these technologies may create bias in hiring.

Criteria for Using Automated Employment Decision Tools

Automated tools that assist employers with decision-making during the hiring process won’t be banned entirely in New York City. The city will allow employers to use automated employment decision tools after they meet certain requirements. This includes:

1. Conducting a bias audit of the automated employment decision tool. This must be an impartial evaluation by an independent auditor. The bias audit must be done within the year before using the tool.

2. Bias audit results must be available to the public. A summary of the results of the most recent bias audit and the distribution date of the tool to which the audit applies, must be publicly available on the employer’s website before using the tool.

Notice Required for NYC Candidates

In New York City, employers that use an automated employment decision tool to screen a candidate or employee must provide certain notices to employees or candidates that reside in the city, including:

  • The employer’s plan to use an automated employment decision tool during the candidate assessment. This notice must be made no less than ten (10) business days before use of the tool and must allow the candidate to request an alternative selection process or accommodation.
  • The job qualifications and characteristics the tool will use in the assessment of the candidate or employee. This notice must be made no less than ten (10) business days before using the tool.
  • If not disclosed on the employer’s website, the candidate’s right to submit a written request for the type of data collected for the tool, data source, and employer’s data retention policy. The employer must provide the information within 30 days of the candidate’s written request unless disclosing this information would violate local, state, or federal law or interfere with a law enforcement investigation.

Employers that violate the restrictions could face civil penalties. The first violation and any additional violations made on that same day will result in a $500 civil penalty. Later violations require a fine of $500-$1,500 for each subsequent offense. The law notes that each day an employer uses an automated employment decision tool is a separate violation. Failing to provide any notice to a candidate or employee is also a separate violation. Additionally, New York City’s corporation counsel, or other persons designated by the corporation counsel, may initiate court proceedings to correct violations, including mandating compliance with the law or other appropriate relief.

If you hire candidates that reside in New York City, you may want to become familiar with this law before the effective date. Employers should review the law with their legal counsel to understand the impact on the hiring process.

Background Check Bill Introduced to Protect Florida Renters

Certain industries require mandatory background checks of employees according to law. Florida is looking to add to that list apartment employees. A new bill, if passed, looks to improve safety and security for tenants. On November 12, 2021, Florida Senator Linda Stewart introduced SB 898 in the Florida Senate. Known as “Miya’s Law,” the bill was introduced in response to the tragic case of Miya Marcano.

“Miya’s death is an awful tragedy – one that has put a spotlight on problems with apartment safety and security,” said Senator Stewart. “We’ve heard too many horror stories of some landlords disregarding the security of their tenants by issuing master keys to maintenance workers without running any background checks. Everyone deserves to feel safe in their homes and we are hopeful that ‘Miya’s Law’ will help make that a reality.”

Bill Defines Employment Requirements

As introduced, SB 898 mandates that landlords require each employee of their apartment establishments to undergo a background check as a condition of employment. Those background checks must:

  • Be performed by a Professional Background Screening Association (PBSA) accredited consumer reporting agency, like Verified Credentials;
  • Include a criminal history check;
  • Search sex offender registries from all 50 states and Washington, D.C.

According to the bill, landlords may disqualify a person from employment if the person has been convicted or found guilty of, or entered a guilty or nolo contendere plea to, the following offenses:

  • Criminal offenses involving disregard for the safety of others that are felonies or misdemeanors of the first degree in Florida or would be considered felonies or misdemeanors of the first degree in Florida if the offenses were committed in another state.
  • Criminal offenses committed in any jurisdiction which involve violence including, but not limited to, murder, sexual battery, robbery, carjacking, home-invasion robbery, and stalking.

Additional Landlord Obligations

In addition to background check requirements, “Miya’s Law” would introduce new safety requirements for landlords. These additional requirements address when and how apartment employees can access tenant units.

Florida state law currently requires apartment employees to provide notice 12 hours before entering a tenant’s home for property repair. If passed, the new law would increase the notice time to 24 hours.

For added tenant safety, the bill includes additional requirements around unit keys. If passed, Landlords will be required to maintain a log accounting for the issuance and return of all keys for each dwelling unit. They must also establish policies and procedures for issuing and returning dwelling unit keys and regulating the storage of and access to unissued keys.

SB 898 is in the early stages of the legislative process and is not yet law. However, the bill has received support from Florida lawmakers and the Florida rental housing industry. Representative Robin Bartleman has filed HB577 in the Florida House, a companion bill to Senator Stewart’s bill in the Senate. The Florida Apartment Association stated, “FAA looks forward to remaining engaged in this effort during the 2022 legislative session and thanks to Senator Stewart and her legislative staff for their hard work on this legislation.”

Employers in Florida may want to follow this bill as it proceeds through the legislative process. Verified Credentials will provide updates as they become available.

U.S. Department of Human Services Seeking Comment on Form I-9 Document Examination Alternatives

Throughout the COVID-19 pandemic, organizations have adjusted how they operate. In March 2020, the Department of Homeland Security (DHS) announced temporary compliance flexibility for certain I-9 requirements. What was first a short-term action has become a longer-term change. The U.S. Immigration and Customs Enforcement (ICE) recently announced that I-9 compliance flexibility will continue into the new year with an extension of the policy until April 30, 2022.

Additionally, DHS announced that it is seeking public input regarding I-9 document examination practices. DHS is exploring alternative options to physical document examination and stated it is interested in obtaining public input about experiences with remote document examination that can be used to inform and improve DHS policies and processes. DHS provided a non-exhaustive list of questions to help individuals as they create comments regarding remote document examination, including:

1. Comments about pandemic-related I-9 compliance flexibility experience, such as:

  • Did your organization use the compliance flexibilities for remote document examination for I-9? Why or why not?
  • How did remote review perform with your technical resources (video and image quality, document retention, etc.)?
  • What was your experience collecting digital images or documents from employees?
  • What was your experience with employees completing and submitting Section 1 of Form I-9 remotely?

2. Comments about potential remote document examination in the future, such as:

  • What are the benefits of a permanent remote document examination option?
  • What types of employers or employees would have interest in a remote option?
  • Should the list of acceptable documents change? What are the costs and benefits of this?

Employers and others can submit comments at regulations.gov. All comments are public and posted on the site. The commenting period runs through December 27, 2021, with late-filed comments considered to the extent practicable.

Lawsuit Filed for Alleged Background Check Disclosure Violations

Amazon is busy this time of year. But a recent court filing may leave it busier than usual. A prior Amazon employee claims the retailer violated a handful of background check disclosure-related laws. Narek Melikyan filed a class-action lawsuit, on behalf of himself and others similarly situated, against Amazon.com, Inc., Amazon.com Services, LLC, Amazon Logistics, Inc., and other unnamed defendants in September 2021 alleging, among other things, that the defendants violated the:

  • Federal Fair Credit Reporting Act (FCRA)
  • California Investigative Consumer Reporting Agencies Act (ICRAA)
  • California Consumer Credit Reporting Agencies Act (CCRA)

The initial complaint states that Melikyan was hired as an Amazon Flex delivery driver in October 2019. Melikyan received a copy of his background report in August 2020 from the defendants’ third-party background report provider. He claims ”[D]efendants had procured and/or caused to be procured a background report regarding him without a required disclosure or… based on a non-compliant disclosure form”.

The complaint alleges, among other things, that defendants violated:

1. The FCRA’s consumer report disclosure requirement. Defendants allegedly didn’t give Melikyan and the other plaintiffs “a clear and conspicuous written disclosure…in a document that consists solely of the disclosure” before completing the checks.

2. The FCRA’s investigative consumer report disclosure requirement. Defendants allegedly didn’t provide written disclosures advising “that an investigative consumer report, including information as to their character, general reputation, personal characteristics, and mode of living, may be made.” The complaint alleges that the defendants did not provide plaintiffs with written disclosures within three days of requesting investigative consumer reports regarding them, advising them of their rights to request additional disclosures and a written summary of rights under the FCRA.

3. The ICRAA’s disclosure requirement. Defendants allegedly didn’t give Melikyan and the other plaintiffs “a clear and conspicuous disclosure in writing that consisted solely of the disclosure which adequately notified the consumer of the nature and scope of the investigation, and fail[ed] to obtain written authorization each time an investigative consumer report [was] sought and procured with a permissible purpose as required by law.” The complaint further alleges that defendants “procured investigative consumer reports or caused investigative consumer reports to be procured for Plaintiff and ICRAA Class Members without complying with the requirements set forth in 1786.16(a)(2) of the ICRAA.”

4. The CCRA’s disclosure requirement. Defendants allegedly obtained “consumer credit reports,” as that term is defined by California law, without providing written notice that:

  • Identifies the specific basis under California law for the use of the report
  • Informs the person of the source of the report, and
  • Contains a box that the person can check off to receive a copy of the credit report.

Initially filed in Los Angeles Superior Court, the case was removed to the U.S. District Court for the Central District of California in November 2021. The case remains pending, and all claims remain allegations at this time. Verified Credentials will continue to monitor this case and attempt to provide updates as they become available.

State Regulator Announces Increased California Fair Chance Act Enforcement

“Fair Chance” -type laws are becoming more common across the country. These types of laws often restrict the types of criminal information employers can consider during the hiring process, or when certain criminal information can be considered. With the increasing adoption of “Fair Chance”-style laws, it’s sometimes unclear how, or if, agencies will enforce these types of laws. But one agency in California is stepping up their enforcement.

Proactive Measures to Enforce California’s Fair Chance Act

On October 20, 2021, the California Department of Fair Employment and Housing (DFEH) announced a new effort to identify and correct violations of the California Fair Chance Act (FCA).

The DFEH plans to use technology to conduct mass searches of online job advertisements for statements that violated the FCA. The department states that, “Blanket statements in job advertisements indicating that an employer will not consider anyone with a criminal history, such as “No Felons” or “Must Have Clean Record,” violate the Fair Chance Act’s requirement that employers consider an applicant’s criminal history on an individual basis, as well as any mitigating information provided by the applicant.”

In one day alone, they found over 500 problematic job postings. Those included “unlawful statements that the employer will not consider any job applicant with a criminal record.”  The DFEH is documenting the violations. Employers involved with the listings will also receive notice to remove unlawful statements.

DFEH’s steps show that state regulators are willing to enforce these types of laws.

But the state isn’t just about punishing violators. In an effort to help educate employers on the FCA, they created a Fair Chance Toolkit for guidance.

Understanding the Law in California to Avoid Violations

Without a clear understanding of the employment laws, you could be putting yourself at risk of a potential violation. For employers that hire in California, that means staying compliant with the FCA (Cal. Gov. Code § 12952). This law generally makes it an unlawful employment practice for companies that employ five or more people, with some exceptions, to:

  • Ask questions about or consider an applicant’s conviction history before a conditional offer. This also entails including questions on an employment application that seek the disclosure of an applicant’s conviction history.
  • Consider, distribute, or disseminate any of the following while conducting a conviction history background check in connection with an application for employment:
    • Arrests not followed by conviction, except when allowed by state law
    • Referral to or participation in a pretrial or posttrial diversion program
    • Convictions that have been sealed, dismissed, expunged or statutorily eradicated
    • Any conviction for which the convicted person has received a full pardon or has been issued a certificate of rehabilitation

In addition to these restrictions, certain employers in California have more to consider if they intend to deny an applicant employment based solely, or in part based on the applicant’s conviction history. This includes:

1. Conducting an individualized assessment of whether the conviction history has a direct and adverse relationship with the specific duties of the job that justifies denying employment to the applicant. The assessment must consider:

  • The nature and gravity of the offense or conduct
  • The time that has passed since the offense or conduct and completion of the sentence
  • The nature of the job

2. Employers that make a preliminary decision to take adverse action after the assessment must send the applicant a notice of the preliminary decision in writing. The notice must contain:

  • What conviction(s) are the basis for the preliminary decision
  • A copy of the conviction history report
  • An explanation of the applicant’s right to respond before the employer’s preliminary decision becomes final. This explanation must detail the deadline for the applicant to respond and inform the applicant that the response can include submission of evidence challenging the accuracy of the conviction history, evidence of rehabilitation or mitigating circumstances, or both

3. Employers must allow the applicant at least five days to respond before making their final decision. If during this initial waiting period the applicant notifies the employer, in writing, that they are disputing the accuracy of the conviction history, and that the applicant is trying to obtain evidence supporting their dispute, the employer must give the applicant five additional days to respond to the notice. The employer must consider information provided by the applicant before making a final decision.

4. If, after considering evidence from the applicant, the employer makes a final decision to deny an applicant based solely or in part on their conviction history, the employer must notify the applicant in writing:

    • Their final denial, which may include justification of their decision
    • Any existing procedure the employer has for the applicant to challenge the decision or request reconsideration
    • The right to file a complaint to DFEH

Employers may want to review their current job postings with their legal team to make sure they remain in compliance with the changing laws.

A Potential Case of Negligence in Florida Emphasizes Screening for Risky Hires

It’s a nightmare scenario when there is a threat to an individual. Or worse, if someone takes another’s life. While tragedies related to an employee are rare, they’re situations for which HR teams may choose to prepare. Many employers even pinpoint safety as a top reason for doing background checks.

A recent complaint filed in Florida relates to a terrible situation like this. An employee of a housing complex allegedly killed a woman, who was a fellow employee and tenant. And while the details are startling, this pending case is a reminder to employers. Companies run a risk of negligence if they don’t hire and employ responsibly. They should act with the safety of their staff, customers, and the public in mind.

Alleged Events that Ended in Tragedy

The estate of the alleged victim, Miya Marcano, filed a lawsuit in Orange County, Florida on October 18, 2021 against Arden Villas Apartments, LLC (“Arden Villas Apartment”) and the D.P Preiss Company, Inc. (“Preiss”), among others. The complaint states that Marcano was hired by Preiss in June, 2021 to work in the front office of the Arden Villas Apartments, where she was also a tenant.

According to the complaint, during her employment, Marcano met Armando Caballero, who also was employed by Arden Villas Apartments and/or their agents or employees, including Preiss. At some point, she voiced her discomfort with Caballero to her parents and colleagues. But, according to the complaint, it was common for management at the complex to ignore complaints from staff and tenants.

In September 2021, Caballero allegedly kidnapped Marcano from her own apartment. The complaint states that Caballero used a key fob, or other access control device, given to him by the defendants to get into Marcano’s residence. She was later found dead.

The complaint states that “At no time was [Marcano] made aware by the management of Arden Villas that Caballero had a criminal background, a history of harassing women, nor was she aware that Caballero would have unsupervised and/or free access to her apartment.”

Accusations of Negligence

Among other claims, the complaints alleges that the defendants should have been aware of the risk Caballero posed. Defendants knew, or should have known, “that he should have not been hired, not been retained, and/or not been given a key fob (or other access device) that provided unfettered access to apartments…”

Additionally, the complaint alleges that because some employees had access control devices that allowed them to enter apartments, “Defendant had a duty to ensure that all persons that sought to work for defendant and/or at Arden Villas, were properly vetted, and that only appropriate persons were hired”.

Filing documents allege that Arden Villas and others breached their duty to exercise reasonable care and safety for the protection of residents, including Marcano. They also claim that the defendants acted in a negligent manner in various respects, including, but not limited to:

  • Failing to adequately vet prospective employees, including Caballero
  • Failing to contact the prior employers of prospective employees, including Caballero
  • Failing to conduct criminal background searches of prospective employees, including Caballero
  • Failing to implement or execute an adequate screening process for potential employees, thereby allowing persons, that otherwise would be deemed dangerous, to work at Arden Villas

This case is pending and the allegations remain only allegations at this stage in litigation. However, this case highlights the potential risks to employers, their staff and customers, and more. Hiring candidates without proper vetting can result in a dangerous situation. Employers may want to work with their legal counsel to determine if their current background checks thoroughly protect their organization.

Hiring in New Jersey? Have Your Summary of Rights Ready

Last year we talked about New Jersey’s state-specific background check disclosure requirements. But this isn’t the only thing employers should know about New Jersey-specific requirements. Like Washington state, New Jersey also has a state-specific Summary of Rights.

According to New Jersey law, if using a background report for employment purposes, before taking adverse action based in whole or in part on information in the report, employers must provide a copy of the report to the candidate. In addition, the employer must also provide the candidate with “a description in writing of the rights of the consumer under [the New Jersey Fair Credit Reporting Act (NJFCRA.)] and the federal ‘Fair Credit Reporting Act’…”

Consumer Rights & Protections in New Jersey

What are the rights of consumers under the NJFCRA?  The NJFCRA is similar to the federal Fair Credit Reporting Act and contains a number of consumer rights, including, but not limited to:

  • Required consent – The candidate must provide written authorization to obtain a background report about them for employment purposes.
  • Required disclosure – Before procuring a background report for employment purposes, employers must provide a clear and conspicuous written disclosure to the candidate. The document must solely disclose that the employer may obtain a background report for employment purposes.
  • Specific disclosuresSpecific disclosures are required if obtaining information in the background report through personal interviews with neighbors, friends, associates, or acquaintances of the candidate or others with knowledge of the candidate. (An “investigative consumer report,” as defined by New Jersey law).
  • Pre-adverse action requirements – If using the background check for employment purposes, employers must provide specific notices to candidates before taking adverse action.
  • Right to information – Candidates have the right to request and receive all information in their file from a consumer reporting agency.
  • Dispute process – Candidates have the right to dispute information contained in their file directly with a consumer reporting agency.
  • Information removal – Consumer reporting agencies are required to delete or modify inaccurate, incomplete, or unverifiable information.
  • Remedies – Candidates have the right to seek damages from violators of the NJFCRA.

Employers should work with their legal counsel to determine if their New Jersey Summary of Rights complies with the New Jersey Fair Credit Reporting Act. Verified Credentials’ clients can access sample documents in the Resource Library, including a sample New Jersey Summary of Rights,  to help as they create their candidate-facing documents.

New Guidance on Cannabis Drug Tests in New York State

Legal recreational marijuana use continues to shake up drug testing policies in the workplace. The state of New York recently joined the growing list of states that have legalized the recreational use of marijuana with the passage of the Marijuana Regulation and Taxation Act (MRTA).  The act, among other things, included amendments to the New York Labor Law.

Changes to the New York Labor Law

The amendments to the New York Labor Law Section 201-D now makes it unlawful, unless otherwise provided by law, for an employer to refuse to hire, employ or license, discharge from employment, or otherwise discriminate against an individual in compensation, promotion or terms, conditions or privileges of employment because of:

  • An individual’s legal use of consumable products or legal recreational activities, including cannabis in accordance with state law, outside of the employee’s work hours, off the employer’s property, and without the use of the employer’s equipment or property.

There are some exceptions.  According to New York Labor Law Section 201-D(4-a), an employer can take action specifically related to the use of cannabis if:

  • The employer’s actions were required by state or federal statute, regulation, ordinance, or other state or federal governmental mandate.
  • The employer would be in violation of federal law.
  • The employer would lose a federal contract or federal funding.
  • The employee displays specific articulable symptoms of impairment while working that decrease the employee’s performance of their tasks or duties or interfere with the employer’s obligation to provide for a safe and healthy workplace as required by state or federal occupational safety and health law.

Additionally, the law states that employers are not in violation of the law if the employer takes action based on the belief that:

  • The employer’s actions were required by statute, regulation, ordinance, or other government mandate.
  • The employer’s actions were permissible pursuant to an established substance abuse or alcohol program or workplace policy, professional contract, or collective bargaining agreement.
  • The individual’s actions were deemed by an employer or previous employer to be illegal or to constitute habitually poor performance, incompetency, or misconduct.

New Guidance on Cannabis Testing

In October 2021, the New York Department of Labor (NY DOL) issued guidance to “address some of the most common situations or questions in the workplace related to adult-use cannabis and the Marijuana Regulation and Taxation Act.”

The NY DOL guidance includes valuable information for employers regarding the amendments to New York Labor Law Section 201-D.  This includes guidance on drug testing employees.  According to the NY DOL guidance, an employer cannot test for cannabis, unless they are covered by one of the limited exceptions from New York Labor Law Section 201-D(4-a), listed above, or other applicable laws.  The guidance goes on to clarify that employers can drug test employees for cannabis if federal or state law requires drug testing or makes it a mandatory requirement.  However, “an employer cannot test an employee for cannabis merely because it is allowed or not prohibited under federal law.”

The guidance clarifies that both the MRTA and New York Labor Law Section 201-D apply to all public (state and local government only, the federal government, as an employer is exempted) and private employers in New York state, regardless of size, industry or occupation. They apply to all employees employed within the State of New York.  They do not apply to employees that work remotely in a different state, individuals that are not employees (e.g., students who are not employees, independent contractors, and volunteers), and employees under the age of 21, as cannabis use by individuals under the age of 21 is prohibited by New York state law.

You may want to review Section 201-D of New York Labor Law and the NY DOL guidance with your legal counsel to determine if you need to make adjustments to your drug testing policy. If you would like to add a drug testing package without cannabis, we can help. Please contact Verified Credentials support for assistance at 800.938.6090 or fill out this form.

Rideshare Companies in the Hot Seat for Screening Practices

Transportation service giants Uber and Lyft have faced a fair share of attention related to their drivers. Buckley v. Uber claim both rideshare companies failed to comply with federal background check laws.  A driver that worked with both companies recently filed a complaint in the Eastern District of New York on August 27, 2021.

The complaint alleges Uber and Lyft, along with their screening provider, Checkr, failed to comply with certain requirements of the Fair Credit Reporting Act (FCRA). More specifically, it alleges that Uber and Lyft failed to follow the FCRA’s “pre-adverse action” requirements.

What Are the Pre-Adverse Action Requirements?

If using a background report for employment purposes, before taking any adverse action based in whole or in part on information in the background report, employers are required to provide the candidate with:

1. A notice that includes a copy of the background report

2. A copy of the FCRA Summary of Rights

Providing these documents gives the candidate a chance to review what was found in their background report. Then, if they believe there was an error in the background report, the candidate has the ability to dispute the information.

Accusations Against the Rideshare Companies

According to the complaint, driver Donald Buckley had been an Uber driver beginning in 2018.  In April of 2021, a background report was ordered by Uber regarding Buckley. Later that month, Buckley “received notice from Uber that there was an issue with his background check. [Buckley] was unable to continue working for Uber with an incomplete background check…”

Regarding his employment with Lyft, the complaint states that Buckley was a Lyft driver beginning in 2019.  In June2021,  Buckley “received an email communication from Lyft stating that they were unable to complete his annual background check and that additional information was needed. Plaintiff was unable to continue working for Lyft with an incomplete background check.”

The complaint alleges that Uber and Lyft, prior to taking adverse action against him, failed to provide Buckley with either:

  • A copy of his background report
  • A written description of his rights under the FCRA

The complaint also contains various additional allegations against Uber and Lyft’s background screening provider, Checkr.

Buckley is seeking damages from all three of the defendants. Of course, the allegations against Uber, Lyft, and Checkr remain allegations at this stage in litigation.  Verified Credentials will attempt to provide updates on this case as they become available.

Planning a Roadmap to Adverse Action

The case against Uber and Lyft is a good reminder to employers about their obligations under the FCRA. Employers that use background reports for employment purposes may want to develop a clear plan if they are thinking of taking adverse action based in whole or in part on information from a background report. Learn more about Verified Credentials’ tool to help employers fulfil FCRA pre-adverse action and adverse action requirements. Work with your legal team to create a plan for your situation.




An Update on an FCRA Disclosure Case

The Fair Credit Reporting Act’s (FCRA) disclosure requirements haven’t always been clear to employers. A recent update to a long-running case, Walker v. Fred Meyer, Inc., adds additional clarification. to what employers may need to do to comply.

Historical Areas of Confusion

Among other things, the FCRA requires employers to notify candidates of the potential use of a background check for employment purposes. The FCRA requires an employer to:

  • Before a background report is procured, provide the applicant/employee with a clear and conspicuous written disclosure, in a document consisting solely of the disclosure, that the employer may obtain a background report on the applicant/employee for employment purposes

On the surface this disclosure requirement may seem straightforward. But employers have been accused of FCRA violations because they misinterpreted what this means. And regulators haven’t offered much guidance.

Luckily, courts have helped establish some points employers may want to consider. Let’s review a recent development in Walker, a case that has previously provided one court’s interpretation of FCRA disclosure requirements.

Walker v. Fred Meyer, Inc.

As previously discussed, the Ninth Circuit Court of Appeals reviewed defendant Fred Meyer’s disclosure document. The Ninth Circuit held, among other things, that some portions of Fred Meyer’s disclosure violated the FCRA’s “standalone disclosure requirement,” while other sections did not.  The Ninth Circuit then sent the case back to the District Court to determine if the remaining sections that did not violate the standalone disclosure requirement were “clear and conspicuous.”

The Latest – Partial Summary Judgement Granted

With the case returned to the lower court, Fred Meyer filed a motion for partial summary judgement seeking a declaration that:

1. Their disclosure was “clear and conspicuous”

2. The company didn’t act “willfully” with its violation of the standalone disclosure requirement

On August 13, 2021, a United States Magistrate Judge issued her findings and recommendation granting Fred Meyer’s motion for partial summary judgement. It was adopted by the District Court on September 24, 2021. Fred Meyer’s motion was granted.

In determining whether Fred Meyer’s disclosure was clear and conspicuous, the District Court relied on another recent Ninth Circuit disclosure case, Gilberg v. California Check Cashing Stores, LLC., stating, “The phrase ‘clear and conspicuous’ is not defined in the FCRA, but the Ninth Circuit has held [in Gilberg] that a disclosure is ‘clear’ when it is ‘reasonably understandable,’ and a disclosure is ‘conspicuous’ when it is ‘noticeable to the consumer.’”

The court found Fred Meyer’s disclosure language clear stating, “…as a whole does not suffer from grammatical errors or the kind of vague language the court found problematic in Gilberg.  Nor does the disclosure include any information regarding state laws that would ‘confuse a reasonable reader,’ like those in Gilberg.”

The court also determined that the disclosure is conspicuous stating, “First, the disclosure paragraphs are confined to a single page surrounded by ample whitespace and are preceded by a clear title [and]… The disclosure uses legible, clear font…Thus, there is no question that Fred Meyer’s disclosure is conspicuous as a matter of law.”

The Ninth Circuit found earlier that portions of Fred Meyer’s disclosure violated the standalone document requirement. In its recommendation to grant partial summary judgement for Fred Meyer, the District Court held that Fred Meyer’s violation was not a willful violation of the FCRA.

According to the court, “an FCRA violation is “willful” if it is made either knowingly or with “reckless disregard” for the requirements…” of the FCRA.  “An employer acts in ‘reckless disregard’ when “the action is not only a violation under a reasonable reading of the statute’s terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with a reading that was merely careless.”

Using this standard, the court determined that “…Fred Meyer’s disclosure was not based on an ‘objectively unreasonable’ interpretation of FCRA’s standalone requirement at the time Walker applied for a position.”  Even though Fred Meyer’s disclosure now violates the FCRA’s standalone disclosure requirement, it was not unreasonable for Fred Meyer to have provided Walker with the disclosure at the time it was provided.

The back-and-forth of these cases can be complex. But it offers valuable insights into the interpretation of FCRA requirements. Employers may want to review these decisions with their legal advisor to learn how they could impact them.

Rhode Island Works to Boost Pay Equality

The topic of salary equality has been prevalent in recent years. As part of this trend, Rhode Island recently passed amendments to its pay equity law.  This law applies to employers that employ any one person in the state of Rhode Island. The amended law aims to “…comprehensively address wage discrimination, based on religion, race, color, sex, sexual orientation, gender identity or expression, disability, age or country of origin by expanding employee protections and the scope of the remedies available to employees who have experienced wage discrimination.”

The governor signed the amended law on July 6, 2021. But employers will have plenty of time to review their policies and procedures. The law is not effective until January 1, 2023.

The amended law makes a number of detailed changes related to pay discrimination. In addition to addressing pay equity, the law also creates:

  1.  1. A wage history ban
  2.  2. A wage range disclosure requirement

Rhode Island’s Salary History Ban

Rhode Island’s salary history ban is similar to others across the country, including  in Nevada and Toledo, Ohio. Rhode Island’s law prohibits employers from:

  • Using wage history when deciding whether to consider an applicant for employment.
  • Requiring that an applicant’s prior wages meet a minimum or maximum criteria as a condition of being considered for employment.
  • Relying on an applicant’s wage history when determining the wages the applicant will be paid after being hired.
  • Seeking an applicant’s wage history.

After making an initial offer of employment with an offer of compensation, employers may use an applicant’s wage history to support a wage higher than the wage offered by the employer. However, an employer can only use wage history for this purpose if the wage history was voluntarily provided by the applicant, without prompting from the employer.  If an employer does use wage history for this purpose, the employer can seek to confirm the wage history.  Employers should take note that employers can only rely on wage history in the circumstances outlined above to the extent that it does not create an unlawful pay differential, as provided by Rhode Island law.

But what if an employer learns of a candidate’s salary history? First, there’s no penalty if the candidate is an employee of the company and the employer has knowledge of the candidate’s wage history with the employer. Employers can still obtain a background check that does not seek wage history.  But if the background check discloses the applicant’s wage history – they may want to proceed with caution. Even with the knowledge, employers can’t use it to make certain decisions. That includes determining wages, other compensation, or benefits for an applicant during the hiring process, including employment contract negotiations.

Additionally, employers are allowed to verify voluntarily provided information about an applicant’s unvested equity or deferred compensation that would be cancelled or forfeited by the applicant’s resignation from their current employment or any voluntary disclosure of non-wage related information.

Wage Range Disclosure Requirement

To add more transparency to the hiring process, Rhode Island’s amended law includes a wage range disclosure requirement. Upon request, employers must give applicants the wage range for the job. The law also states that employers should provide the wage range for the job the applicant is applying for before discussing compensation during the hiring process. In addition to applicants, employers must also give employees the wage range for their position at the time of hire, when moving into a new position, and anytime upon the employee’s request during the course of employment.

Employers may not refuse to interview, hire, promote, employ, or retaliate against an applicant or employee who either didn’t provide wage history or requested the wage range for a position.

Employers should work with their trusted legal counsel to determine if changes are needed to their current process.

Complaint Filed Against Walmart for Hiring Policies

The United States’ largest private employer faces a proposed nationwide class action lawsuit based on its screening policy. A complaint filed on July 16, 2021 alleges that Walmart “denies employment to many qualified applicants because of unrelated and/or stale criminal history” It also alleges the company “fails to account for evidence of rehabilitation or mitigating circumstances” related to criminal records.

One Experience Highlights the Experience of Many

The complaint against Walmart outlines the experience of named plaintiff Jacqueline Ramos. It alleges that Ramos is “a Black and Latinx woman who had a previous criminal conviction at the time she applied for employment at Walmart that was unrelated to the employment” she applied for.  The complaint claims that Ramos was qualified to work for Walmart, despite her conviction history, having completed a six-month internship with a Walmart subsidiary doing the same work she would have performed for Walmart.

Ramos states that she received an offer of employment from Walmart, but that “her job offer was… rescinded by Walmart because of her criminal history.”  According to the complaint, Ramos provided “strong evidence of her rehabilitation and mitigating circumstances”, but Walmart “failed to account for, or even consider” the evidence that was submitted.

Complaint Highlights Racial Disparities in the Justice System

The complaint makes the allegation that “[a]s a result of its overbroad policy, Walmart denied employment to Plaintiff and disproportionately denies employment to countless other Black and Latinx applicants.”

It states that “Walmart’s criminal history policy must be understood in the context of the reality that individuals who are Black or Latinx are significantly over arrested, convicted, and incarcerated in the United States.”

The filing alleges “Walmart’s criminal history screening policy and practice of denying opportunities to individuals with criminal convictions… constitutes unlawful discrimination on the basis of race, color, and/or national origin”, in violation of:

1. Title VII of the Civil Rights Act of 1964 (“Title VII”), as amended, 42 U.S.C. §§ 2000e et seq.

2. New Jersey Law Against Discrimination (“NJLAD”), N.J.S.A. 10:5-1 et seq.

It further alleges, in clarification of its discrimination claims, that Walmart’s criminal history policy has a disparate impact on Black and Latinx applicants and is not job-related or consistent with business necessity.

The class action complaint proposes two separate classes of individuals.  The first is a “Nationwide Class” of all “Black and Latinx individuals nationwide who, during the relevant statute of limitations period, were denied employment at Walmart based in whole or in part on their criminal history.”  The second is a “New Jersey Class” of all “Black and Latinx individuals in New Jersey who, during the relevant statute of limitations period, were denied employment at Walmart based in whole or in part on their criminal history.”

The allegations against Walmart remain allegations at this stage in litigation – no wrongdoing has been established at this point.  Verified Credentials will attempt to provide you with updates to this case as they become available.

Like the recent cases against Macy’s and New York Life Insurance Company, the claims against Walmart serve as a reminder that any employer that uses background checks for employment purposes should take care to ensure that their background screening policies comply with anti-discrimination laws.

If you have further questions about background screening compliance, you may wish to speak with trusted legal counsel.

I-9 Compliance Flexibility Extended Until the End of 2021

I-9 compliance has looked different for some employers since the beginning of the COVID-19 pandemic. The U.S. Department of Human Services (DHS) has offered continued I-9 flexibility to employers. On August 31, 2021, the U.S. Immigration and Customs Enforcement (ICE) announced that the flexibility will continue through the end of the year.

I-9 compliance flexibility will remain in place for employers with remote-only staff. According to ICE, employers may use flexible rules for employees hired on or after April 1, 2021. This policy applies to staff that works “exclusively in a remote setting due to COVID-19-related precautions.”

The extended policy expires on December 31, 2021.  DHS states that it will continue to monitor the ongoing national emergency and provide guidance as needed.  Employers are required to monitor DHS and ICE websites for additional updates on when extensions will be terminated, and normal operations will resume.

A Quick Review

While you may be familiar with this ongoing I-9 compliance flexibility, here’s a recap of the policy:

  • The flexibility refers to the physical inspection of an employee’s identity and employment authorization documents. Eligible employers can inspect their employee’s documents through methods like video, fax or email first. Employers must still obtain, inspect and retain copies of the documents within three business days. I-9 compliance flexibility is available for employers and workplaces that have employees working remotely and only for the employees working remotely. If employees are working on-site, no exceptions apply.
  • Once normal operations resume, employees onboarded using remote verification must report to the employer within three business days to verify the employee’s identity and employment eligibility documentation in-person. Employers that utilize the remote inspection option must provide written documentation of their remote onboarding and telework policies for each employee.
  • DHS has listed specific language for what should be included on the I-9 form when in-person physical inspection of documents has been delayed. Employers that take advantage of the I-9 compliance flexibility may want to review the DHS announcement carefully to ensure that their I-9 forms continue to meet DHS requirements.

For up-to-date details on I-9 compliance flexibility, check out I-9 Central.

Maine Beacons a Change in Hiring Practices

Like lighthouses dotting the coast of Maine, “Fair Chance” laws throughout the country provide a guiding light to prevent employers from running into rocky compliance issues. Maine is one of the latest states to pass this type of law. “An Act Relating to Fair Chance in Employment,” or Maine LD 1167, was signed by Governor Janet Mills on July 6, 2021. The law will be effective on October 18, 2021.

The state of Maine’s new law prohibits employers in the state (with some exceptions) from asking about criminal history record information in certain situations. Let’s better understand more about Maine’s new restrictions.

Application & Job Posting Restrictions

Like many other ban the box-style laws across the country, Maine’s law makes it illegal for employers to request criminal history record information on initial application forms. But the state’s restrictions go beyond the basics.

Maine’s law states that employers cannot make statements on initial application forms, advertisements, or specify, prior to determining a candidate is otherwise qualified for the job, that a person with a criminal history cannot apply or will not be considered for a job.

The state has outlined situations where employers may be exempt from these restrictions, including:

  • When a position is one where federal or state law, regulation or rule creates a mandatory or presumptive disqualification for one or more types of criminal offenses. In this case, questions and statements on the initial application form are limited to the specific criminal offense(s) that creates the disqualification.
  • When an employer is obligated under federal or state law, regulation or rule not to employ a person who has been convicted of one or more types of criminal offenses. In this case, questions and statements are limited to the specific criminal offense(s) that creates the obligation.

Interview Restrictions

In many cases, after the initial application, Maine employers have more freedom. An employer may ask a candidate about criminal history record information during an interview or once the candidate has been otherwise determined to be qualified for the job.

For employers that ask a candidate whether they have been convicted of a crime, Maine requires them to give candidates more room than just answering “yes” or “no” Employers must give candidates the chance to explain the information and circumstances regarding any convictions, including post-conviction rehabilitation.

As we approach fall, and the effective date of this new law, employers in Maine may want to review their applications, job postings, and more to make sure they align with the new requirements. Violations could start to add up for employers that don’t comply. Employers may be subject to penalties between $100 – $500 for each violation of the law.

If you have questions about how this law may impact your hiring process, you should work with your legal counsel.

Fair Chance Act Guidance Updated for New York City Employers

Amendments to the New York City Fair Chance Act (NYC FCA) took effect on July 29, 2021. According to the New York City Commission on Human Rights (NYCCHR) the changes generally “…[add] new protections for people whose criminal history includes unsealed violations and unsealed non-criminal offenses.  [The amendments] expand the protections of the Fair Chance Act to cover current employees and to reach pending cases.”  The NYC FCA applies to specified employers in New York City.

Before the amendments took effect, the NYCCHR issued updated Fair Chance Act guidance for employers. The guidance outlines how the NYCCHR has interpreted the NYC FCA and has tips on actions for employers to take to remain in compliance with the updated law. The revised guidance includes valuable insights for employers in the city. The NYCCHR’s lengthy guidance covers a lot of information, but there are a few key clarifications within the guidance to consider:

1. Examples of Non-Conviction Records that Employers Can’t Consider.

As we discussed, in general, the NYC FCA now prevents employers from inquiring about, denying employment or taking adverse action based on certain non-conviction records. In its guidance the NYCCHR lists some of these types of records that qualify as non-conviction records including an arrest without conviction, dismissed charges, and more. While detailed, the list is not exhaustive. There may also be exceptions for some employers.

The guidance also provides recommendations on how to permissibly ask about conviction history without violating the prohibition on inquiring about certain non-convictions, including providing a model conviction history question that employers can use.  The NYCCHR notes that employers cannot disqualify a candidate based on their refusal to answer an unlawful question about non-convictions.

2. Details on How to Conduct a Fair Chance Analysis.

In New York City, employers are required to do a Fair Chance Analysis if they are considering taking adverse action based on an applicant or employee’s conviction history.   The recent amendments to the law established NYC FCA specific “relevant fair chance factors,” in addition to state law fair chance factors.  The NYCCHR’s guidance details both city and state fair chance factors and provides clarification on when each set of factors should be used to conduct a Fair Chance Analysis.

3. Information on Additional Employee Protections.

After the recent amendments, the NYC FCA now also applies to current employees, in addition to new job applicants. The law protects employees from criminal history backlash unrelated to their role. The guidance provides additional detail on the protections now extended to current employees.  This includes, among other requirements, more information on both the new Fair Chance Analysis and Fair Chance Process for current employees.

4. Information on Additional New Candidate Protections.

The NYCCHR guidance makes one thing clear: “unless an exemption applies, criminal history may not be sought or considered by employers before a conditional offer of employment.” This extends to omitting any mention of a “criminal background check” when disclosing or getting authorization for an employment related background check prior to a conditional offer of employment. The NYCCHR encourages employers to use alternative terms rather than “background check”. It prefers use of “consumer report” or “investigative consumer report” instead.

These preferred terms are also reflected in select sample compliance documents from Verified Credentials. We offer sample documents incorporating this guidance for employers that hire candidates that live or work in New York City to review as they create their own. Clients can find these in our Resource Library.

5. On Considering a Two-Phase Background Check.

The new guidance details what employers should not do or consider before making a conditional job offer. And what they should do and can consider after. The guidance states that requesting and reviewing criminal history can only happen after favorably evaluating an applicant’s non-criminal information.

In fact, the NYCCHR suggests that employers working with a screening company should receive background information in two stages. First, obtain non-criminal background information. If the applicant is still in the running after reviewing that information, and the employer extends a conditional offer of employment to the applicant, then the employer can look at criminal history background information.  Because driving records may contain both non-criminal and criminal information, the NYCCHR instructs employers to only consider and review driving records after a conditional offer has been extended.

Separate review of non-criminal and criminal information, according to the guidance, insulates the employer from potential discrimination liability.

The NYCCHR acknowledges that some employers may face challenges if they are unable to get two separate reports from their screening provider. In those cases, the employer must establish a system to separate information. That way decisionmakers don’t receive the criminal history information until after making a conditional offer. Employers who take this route bear the burden of proving  the criminal history information was inaccessible to decisionmakers only after the conditional offer was made.

While an uncommon practice, Verified Credentials has adapted the screening process into a two-part process for other employers. If you need to learn about this unique process, our team is happy to help!

If you have questions about how you should apply this guidance to your screening, contact your trusted legal team.

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