The Devil Inside: The Legal Liabilities of Background Screening

By Aldrich, Catherine | Risk Management, February 2007 | Go to article overview
Save to active project

The Devil Inside: The Legal Liabilities of Background Screening

Aldrich, Catherine, Risk Management

A routine criminal background check by a major bank with operations in several states found that an applicant applying for a teller position in Wisconsin had felony convictions for rape and sexual assault. Following established corporate procedures, the hiring manager informed the applicant of these findings, and swiftly rejected his application for employment. Within weeks, the applicant filed a wrongful hiring discrimination lawsuit. The bank defended the action vigorously but was found to have violated fair hiring laws and was ordered to pay a judgment of more than $1 million as well as offer the sex offender employment within the company. What went wrong?

As the bank would soon discover, compliance with both federal and state laws regulating background checks is paramount in all screening processes. The existing regulatory environment is a patchwork of disparate rules and regulations, but an employer must follow all relevant laws in force in the locale where they are hiring to avoid creating potentially costly liability.

The bank had established what it thought were reasonable hiring standards and had followed all the privacy roles contained in the Fair Credit Reporting Act (FCRA) pertaining to background checks. But it had ignored local restrictions that stated an employer could only consider prior criminal convictions that were significantly related to the performance of the applicant's prospective job. The court in this case ruled that since a bank teller working behind a security partition would never be in physical contact with customers, there was no possibility for assault or rape during the conduct of his job. Therefore, the bank could not use the prior felony convictions in its hiring deliberations.

Why Screen?

Savvy risk managers know that when it comes to recruiting and hiring a quality workforce, character counts. With more and more evidence confirming that resumes from many of today's job applicants often contain discrepancies, employers cannot rely on a piece of paper and a person's interviewing skills alone. Thus, a comprehensive background check is increasingly becoming a required practice for employment purposes.

A background check is, in very broad terms, an inquiry into an individual's character, general reputation, personal characteristics and overall ethical patterns. Depending on an employer's risk reduction goals, a background check may include a criminal history search as well as a thorough review of credit reports and/or driving records. More rigorous background checks may include verification of employment history, education, professional references and professional licenses held, and mandated industries also include drug testing and fingerprint records.

The overall goal of requiring a background check as a condition of employment is to hire the most qualified applicant, while simultaneously reducing the risk of hiring the wrong applicant. Some of the most compelling risk reduction reasons for conducting background checks include:

* Reduce shrinkage. A national study by the University of Florida indicates that 48% of inventory shrinkage is due to employee theft. A criminal records search can help identify potential thieves before they are hired.

* Protect your customer. Many applicants will access to customers' personal identification information during the execution of their job. A criminal records search can identify those with a history of fraud to safeguard operations.

* Reduce workplace violence. Criminal searches can identify applicants with a history of violence that could disrupt operations, ruin its reputation and lead to potential lawsuits.

* Eliminate drug use. Drug-free workers are more productive, miss fewer days of work and better embrace an organization's goals and values.

* Uncover deception. Applicant integrity is an essential character trait, so verification of employment and education history is essential to make sure that applicants have the experience that they claim and can achieve the performance and efficiency that an organization expects.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

The Devil Inside: The Legal Liabilities of Background Screening


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?