October 6, 2014

Disciplining off-duty conduct: why the NFL model doesn’t work in the real world

Posted in Application Process, Arrest records, Background Checking, Ban the Box, Child Abuse and Neglect, Conviction Records, Credit Checks, Criminal History, Discrimination, Fair Credit Reporting Act, Interviewing, Minnesota Human Rights Act, Negligence, Negligent Hiring, Negligent Retention, Negligent Supervision, Title VII of the Civil Rights Act of 1964 tagged , , , , , , , , at 4:15 pm by Tom Jacobson

Police light122811Imagine that you’re an HR director and a security-cam video supposedly depicting one of your key employees knocking out his girlfriend in an elevator ends up on YouTube for the world to see. Or, imagine that one of your key employees is indicted for abusing his son after photos allegedly depicting the boy’s wounds from his dad’s switch go viral. Imagine further that neither incident occurred on your company’s premises or while the employee was on the job.

Sound familiar?

Fortunately, most of us never have to deal with employees who make headlines like Ray Rice and Adrian Peterson (see Ray Rice Terminated by Team, Suspended by NFL after New Violent Video, CNN Sept. 16, 2014; Minnesota Vikings Reverse Course, Suspend Adrian Peterson, ABC News Sept. 17, 2014). However, all employers must occasionally confront the challenge of what to about an employee’s off-duty misconduct.

With the suspensions of Rice and Peterson fresh in our minds, it may seem like an easy solution: suspend or fire any employee who is charged with or convicted of a crime that we find repulsive or contrary to our organization’s values. That may work in the NFL, but for the rest of the working world, it’s not that simple. There are many laws that limit how employers may use such information.

One example is Title VII of the Civil Rights Act of 1964. Among other things, this law prohibits racial discrimination in employment. Applying Title VII, the courts have said that the overly restrictive use of criminal background information in the workplace is unlawful because it disproportionately excludes certain racial groups from employment.

So, what is too restrictive? There is no hard and fast rule, but the Equal Employment Opportunity Commission, which enforces Title VII, has provided some guidance (see Background Checks: What Employers Need to Know). Specifically, the EEOC first stresses that employers who obtain criminal history information about employees or applicants must do so uniformly: doing it for only members of protected classes will violate Title VII.

The EEOC also notes that once such information is obtained, it must be used in a non-discriminatory way:

  • The same standards must be applied to everyone.
  • A policy or practice must not exclude people with criminal records if the policy or practice significantly disadvantages individuals with a protected characteristic and does not accurately predict who will be a responsible, reliable, or safe employee. As stated by the EEOC, the policy or practice is unlawful if it has a “disparate impact” on protected employees and is not “job related and consistent with business necessity.”
  • Be prepared to make exceptions for problems potentially caused by disabilities.

To determine whether a person’s criminal history is “job related and consistent with business necessity” under Title VII, employers need to consider: the nature and gravity of the offense or conduct; the time that has passed since the offense or conduct and/or completion of the sentence; and the nature of the job held or sought (see Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964, EEOC April 25, 2012).

Another federal law, the Fair Credit Reporting Act, also applies when employers hire a third party to conduct background checks. The FCRA includes requirements about what employers must do before obtaining such information and what they must do before and after taking adverse action based on the reports obtained. The FCRA is enforced by the Federal Trade Commission, which has published a summary of employers’ obligations under the law (see Using Consumer Reports: What Employers Need to Know, FTC Jan. 2012).

For Minnesota employers, the state’s “Ban the Box” law (Minn. Stat. Sect. 364.021) presents another challenge. Like Title VII, this law does not prevent an employer from considering a person’s criminal history when making work-related decisions. It does, however, restrict when that information may be obtained or used. Specifically, the law prohibits employers from inquiring into or considering criminal records or history until after applicants have been selected for an interview or, if there is no interview, after a conditional offer of employment is made.

With all of these restrictions, why even bother looking into someone’s off-duty conduct?

Despite these challenges, it’s still good business to hire and keep employees who fit well with the organization. And, there are  risk-management reasons for doing background checks.

For example, if a Minnesota employer does not check an applicant’s background thoroughly enough, it can be held liable for negligently hiring someone who later harms another. That was the situation in the case of Ponticas v. K.M.S. Investments where a landlord was held responsible for its property manager’s sexual assault of a tenant.  The landlord had only done a cursory background check on the manager, and a better pre-hire investigation would have revealed the manager’s history of violent crime.

Similarly, if employees start to exhibit behaviors suggesting that they might harm others, their employers can be held liable for failing to protect those who are eventually harmed.  The Minnesota Supreme Court recognized this concept in the case of Yunker v. Honeywell, where an employee murdered a co-worker after a number of post-hire incidents suggested that the employee had violent propensities.

Now imagine again that video or indictment on your desk. Or imagine that your background check has revealed some other off-duty misconduct that you wished you never knew about. Know that the NFL’s model simply does not apply in the real world. Employers facing these situations should think carefully and not automatically leap to the conclusion that the employee should suffer some work-related consequence in addition to whatever sanction s/he got elsewhere.

For more information about this article, please contact me at alexandriamnlaw.com or  taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2014 Swenson Lervick Syverson Trosvig Jacobson Schultz, PA

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February 19, 2014

Fair Credit Reporting Act — a trap for the unwary

Posted in Application Process, Background Checking, Credit Checks, Fair Credit Reporting Act tagged , , , , , , , , , at 10:54 am by Tom Jacobson

In my last post, I noted how Minnesota’s new “ban the box” law limits how private sector employers may check the criminal history of potential employees. Another trap for employers who conduct background checks is the Fair Credit Reporting Act.

The FCRA is a federal law that restricts how employers may obtain and use consumer reports and investigative consumer reports in connection with hiring and making other decisions about employees. For example, the law requires that applicants and employees must be notified in writing of the employer’s intent to obtain such reports before they are obtained. This notice must be a “stand alone” document that contains only the disclosure. Minnesota law also requires that this notice must contain a box for the applicant or employee to check to indicate whether s/he wants to receive a copy of the report (which must be provided free of charge).

Other FCRA requirements include obtaining the applicant’s or employee’s signed authorization before requesting or obtaining consumer reports or investigative consumer reports, certifying FCRA compliance to the consumer reporting agency from whom the reports are obtained, and providing written notices to an applicant or employee both before and when adverse action is taken based in whole or in part on a consumer report or investigative consumer report. Along with the written adverse action notices, employers must also provide a form known as the Summary of Your Rights under the Fair Credit Reporting Act. The Federal Trade Commission adopted a new summary of rights form which employers must use effective January 1, 2013.

Of course, the FCRA also has detailed definitions of what is a “consumer report,” “investigative consumer report,” “consumer reporting agency,” etc.

The consequences for non-compliance with the FCRA can be steep, for individuals may bring private lawsuits against employers who violate the law. In addition, certain federal and state agencies may seek injunctive relief and penalties. Criminal sanctions are also possible if an employer obtains information from a consumer reporting agency under false pretenses.

Obtaining credit information can be valuable tool for screening applicants and employees, especially if the job at issue involves financial management or oversight. However, employers obtaining consumer reports and investigative consumer reports must strictly comply with the FCRA and any of its state counterparts.

For more information about this article, please contact me at alexandriamnlaw.com or  taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2014 Swenson Lervick Syverson Trosvig Jacobson Schultz, PA

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