The U.S. Equal Employment Opportunity Commission (EEOC) created quite a stir among employers when it released its controversial enforcement guidelines two years ago, “Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964.” Now, the EEOC has partnered with the Federal Trade Commission (FTC) to issue a joint publication, “Background Checks: What Employers Need to Know” (March 10, 2014).   In the Joint Publication, the agencies each affirm their increased emphasis on enforcing the antidiscrimination and consumer protection laws as they apply to the use of background checks. The Joint Publication discusses the application of these laws to all manner of “traditional” background checks, including criminal records, financial history and medical history, as well as the review of an employee’s or applicant’s use of social media, in connection with an employer’s personnel decisions.

Both the EEOC and the FTC enforce laws that apply to employees and job applicants. The EEOC administers laws that ensure information an employer obtains during a background check process is not used to make discriminatory decisions about an employee or a job applicant based on his or her race, color, national origin, sex, religion, disability, genetic information (including family medical history) or age. Similarly, the FTC enforces the Fair Credit Reporting Act (FCRA), which mandates the accuracy, fairness and privacy of information collected by consumer reporting agencies, including information regarding an employee’s or applicant’s check writing history, medical records and rental history. An employer must follow procedures required under the Fair Credit Reporting Act whenever it obtains or relies on a background report from an outside reporting agency to make an employment decision.

The new Joint Publication demonstrates that both agencies will continue to scrutinize the ways employers collect and use background information. In it, the EEOC reminds employers that it is illegal to decide to check an employee’s or applicant’s background when that decision is based on race, national origin, sex, religion, disability, genetic information (family medical history) or age. The EEOC further warns employers in the Joint Publication of the disparate impact problems often associated with basing employment decisions on background issues that might be more common among people within certain protected classes. Indeed, the Joint Publication reminds employers that a policy or practice that significantly disadvantages individuals of protected classes is not an accurate predictor of who will be a “responsible, reliable or safe employee.” The Joint Publication also reminds employers that they cannot ask medical questions of a candidate before a conditional job offer is made; rather, such questions can only be asked after the person has started the job and only where the employer has objective evidence that the employee is unable to do the job or poses a safety risk because of a medical condition.

The Joint Publication also advises employers that singling out people of a certain race by asking about their financial histories or criminal records is evidence of discrimination, and it points out that exploring an applicant’s or employee’s use of social media could place employers at risk if the information identified is used in a discriminatory manner when making an employment decision.

The Joint Publication further reminds employers that the FCRA requires that they inform an applicant or an employee that they might use the information obtained from a background reporting company for making employment decisions. The notice cannot be given orally or included within the employment application, but must be in writing and in a stand-alone format. The Joint Publication further notes that, when employers decide to take an adverse action based on background information they obtained from a reporting company, the FCRA requires employers to first give the applicant or employee a written notice that includes a copy of the consumer report relied upon in making the decision and a copy of “A Summary of Your Rights Under the Fair Credit Reporting Act.” After taking the adverse action, employers must then inform the applicant or employee that:

• he or she was rejected because of the information in the report and provide the name, address and phone number of the company who provided the report;

• the company providing the report did not make the employment decision and cannot give specific reasons for it; and

• the employee or applicant has a right to dispute the accuracy or completeness of the report and can obtain an additional free report from the reporting company within 60 days.

The EEOC and the FTC also released a related publication, “Background Checks: What Job Applicants and Employees Should Know,” which informs job applicants and employees of their rights and protections under the laws enforced by the two agencies. The publication offers job applicants and employees examples of illegal employer conduct and instructs them to be vigilant as to the way that their background information is used.

In light of the Joint Publication, employers should review their current practices associated with background checks to ensure compliance and avoid undue scrutiny by the EEOC and the FTC. In addition, employers should be mindful that numerous state and local jurisdictions across the United States also have adopted their own statutory restrictions on the use of background information in making employment decisions.