Top 10 Background Screening Predictions for 2016

When it comes to background screening, drug testing and employment verification, human resource professionals and employment attorneys must keep pace with ever-changing rules, regulations, laws and more. What are the trends facing the industry for 2016, and what will have the greatest impact on the practice of human resources and employment law?

Here are Hire Image’s top 10 predictions for what’s still “hot” from last year and why, and what’s coming down the pike that demands attention and focus for 2016:

  1. “Ban the Box” initiatives will turn into “Fair Chance” policies

“Ban the Box” intends to create a situation where employers are required to wait until later in the hiring process before asking about an applicant’s criminal history. By removing the question about conviction history from the application, employers are unable to eliminate an applicant simply based on his or her answer and would be more likely to base the hiring decision on the applicant’s qualifications. As the movement has grown, so have its goals and requirements.  Rather than simply eliminating the criminal conviction checkbox, many of the laws now go further and require that an employer wait until after a conditional offer of employment to inquire about criminal history, limit the type or age of conviction records they consider, as well as conduct an individualized assessment of the applicant’s criminal past before choosing to rescind that offer. To date, seven states and the District of Columbia have implemented laws that impact private employers, and several major cities and counties have also taken up the cause within their own jurisdictions. San Francisco and New York City have adopted more comprehensive Fair Chance policies which proponents claim support a broader agenda of community economic development, criminal justice reform and civil rights protection. New “Ban the Box” laws introduced in 2016 will all likely include Fair Chance components. It is also expected that many of the current laws will be updated to incorporate Fair Chance components, as Philadelphia has chosen to do. Employers will need to understand and comply with not only the requirements under the Fair Credit Reporting Act (FCRA) when it comes to background checks, but also the added requirements of those laws in the states, counties, or cities in which they do business.

Click here for a list of all current “Ban the Box” laws.


Kohl’s Posts Important Victory in FCRA Class Action Case

A federal judge in California has granted a motion to dismiss in the class action lawsuit COLEMAN v. KOHL’S DEPARTMENT STORES, INC. Former employees Kayoni Coleman, employed by Kohl’s in California from October 2012 to June 2013, and Diane Pemberton, employed by a store in Kissimmee, FL from mid-2014 to January 15, 2014, claimed that Kohl’s unlawfully combined the Consent and Disclosure used for background checks within the same packet as the employment application rather than making it a stand-alone as is required under the Fair Credit Reporting Act (FCRA).

The judge, however, found that the plaintiffs failed to prove that Kohl’s had willfully violated the FCRA and cited the plaintiff’s own admission that the Employment Application and Consent and Disclosure Form were two separate documents. A review of the documents submitted by Kohls as exhibits also made it clear to the court that they were two separate documents and the judge spoke to this clearly in the ruling: (more…)

Rental car agencies latest to be sued for FCRA violations

Two class-action lawsuits were filed last week against major car rental companies for alleged Fair Credit Reporting Act (FCRA) compliance violations. In both cases, the issues at hand pertain to the background screenings the companies run on prospective employees. The cases show the importance of compliance with the FCRA by both employers and background screening companies.

Hertz Corporation was hit with a lawsuit (filed in San Francisco on June 9) for allegations, among others, that its job applicants were not properly presented with the appropriate disclosure and authorization forms and a summary of their rights under the FCRA prior to having a criminal background check run on them. The suit also alleges the company did not follow proper pre-adverse action procedures as defined by the FCRA. Although Hertz outsources the pre-adverse action process to its third party background screening provider, Hertz is ultimately responsible for compliance in this area. (more…)


Home Depot USA, Inc. (Home Depot) agreed to pay $1.8 million to settle a class action lawsuit for allegedly violating the Fair Credit Reporting Act (FCRA) over its background check policies. According to the agreement, Class Members will received between $15 to $100. The proposed class includes approximately 120,000 individuals. The initial complaint alleged that Home Depot’s background check disclosure forms contained extraneous information with a release of liability statement, violating the FCRA. Fernandez v. Home Depot USA, Inc., No. 8:13-cv-00648

Here is a reminder of how to stay in compliance with FCRA requirements:

  • The FCRA summary of rights must be provided to the applicant before performing a background check and also if/when a Pre-Adverse action letter is sent to the applicant. In order to stay in compliance with the FCRA, this summary of rights must be given to applicants at both times. The latest form can always be found at
  • Disclosure and Authorization forms must be stand-alone documents. They should not contain extraneous information, and they must be given to applicants at the proper time. Before performing a background check, an employer must disclose in writing to an applicant/employee that he/she will be the subject of a background screening. The employer then must obtain a signed authorization from the applicant/employee permitting the background check. The FCRA allows the disclosure and authorization forms to be combined into one document; however it must be a stand-alone document and not made a part of the employment application. It is also important not to have a release of liability included on these forms.
  • Employers must notify applicants when an adverse employment decision is made based on any part of a background check. The FCRA requires a Pre-Adverse Action letter be provided to the applicant to give them a chance to to review their report and dispute any information they believe to be inaccurate. The Pre-Adverse letter should contain a copy of the report along with the ‘FCRA Summary of Rights’. After a final decision has been made not to hire, the employer must send a second Adverse Action letter, sometimes called “Final Adverse Action” or “Second Notice.”

FCRA class action lawsuits have the potential to be extremely costly as evidenced in the latest settlement with Home Depot. Plaintiffs can recover up to $1,000 per violation plus attorney fees, punitive damages and actual damages. It is important that employers and hiring personnel keep these lawsuits in mind when developing and carrying out hiring procedures. Click here for more information about staying in compliance with the FCRA.



A California judge has recently ruled that Paramount Pictures Corporation has not run afoul of the federal law when it ran a credit report check on employment applicants, and has dismissed the class action lawsuit.

The lawsuit (Peikoff v. Paramount Pictures Corporation) alleged that, in 2011, Paramount had procured a consumer report on an applicant based on an ‘illegal’ disclosure and authorization form. The FCRA requires that a disclosure must be provided to an applicant stating that the consumer report may be obtained for employment purposes, and that the consumer must then authorize this in writing. The plaintiff accused Paramount of a potential FCRA violation because Paramount included this statement in its disclosure: “I certify that the information contained on this Authorization form is true and correct and that my application may be terminated based on any false, omitted, or fraudulent information. This one-sentence certification language that Paramount included in its disclosure form was found to have served to “focus the consumer’s attention on the disclosure.” The judge dismissed the case despite noting that Paramount’s form “did not comply with a strict reading of (the) requirement that the document consist solely of the disclosure and the authorization.” By using this language, the judge ruled that it did not act in “reckless disregard of the requirements of the FCRA.”

As we’ve stated before, a number of district courts have not always agreed on interpretation of the laws, so the outcome of an FCRA lawsuit is never guaranteed. However, why would an employer open itself up to the hassle and expense of a lawsuit by risking an FCRA violation? Although Paramount won, mounting a defense is costly and the outcome is not predictable, as evidenced by the 2014 Publix supermarket chain FCRA violation that paid out nearly $7 million in a settlement over a similar case to Paramount’s. Any company, no matter what the size or revenues, can prevent legal problems by making it a practice to strictly adhere to FCRA requirements in their hiring process.