Failed Background Check Part 2 – Discrimination and Actionable Steps


Part 1 of our “Failed Background Check” series can be found Here.

Background information you receive from any source that may cause you to dismiss an applicant cannot be used to discriminate. This could likely result in the violation of federal law.

Here are a few things to think about to avoid discrimination against a candidate after a failed background check:

  • Apply the same standards to everyone, regardless of their race, national origin, color, sex, religion, etc.
  • The EEOC stresses special care when basing employment decisions on background problems that may be more common among people of say, a certain race, national origin, sex, or religion.
  • Be prepared to make exceptions for problems revealed during a background check that were caused by a disability. If a disability could cause an issue, allow the applicant to demonstrate their ability to do the job unless doing so would cause a financial or operational difficulty.
  • Before you make adverse employment choices, you must give the applicant a copy of the report you relied on to make your decision, as well as a copy of "A Summary of Your Rights Under the Fair Credit Reporting Act." This will be provided to you by the company that provided the background screening report. Be sure to check local statutes, as many cities, counties and states have their own laws and regulations governing applicant rights
  • After action has been taken, the applicant must be told that he or she was rejected because of information in the report and that they have the right to dispute the accuracy of the report. Provide contact information of the company that conducted the report and let the applicant know that the company selling the report didn't make the hiring decision and can't give specific reasons for it.
  • Finally, any personnel or employment records you make or keep must be preserved for one year after the records were made, or after a personnel action was taken, whichever comes later. And, if the applicant or employee files a charge of discrimination, you must maintain the records until the case is concluded. Once you've satisfied all applicable retention requirements, securely dispose of the reports -- and any information gathered from them.

This is a complicated area. For more information about these and other federal anti-discrimination laws, visit

With all of this said, let’s revisit a trend that seems to keep gaining traction: the” ban the box” or “fair chance” campaign. “Ban the box” goes back to 2003 when organizers in California worked to reduce the stigma of those with criminal records during the employment process. In 2006, San Francisco was the first city to approve legislation to remove questions of prior arrests and convictions on employment applications. That has grown to 33 states and more than 150 cities and counties today.

While your company may encourage or even embrace providing a second chance to convicted felons, background checks are still important. Hiring former inmates can carry a stigma, real or perceived and employers need to consider many things when making this choice. If your company still carries the former conviction box on applications, it is considered a best practice to remove it. Make sure you understand local and state laws should you decide to rescind a job offer based prior convictions.

As always, understand your responsibilities under the federally mandated Fair Credit Reporting Act (FCRA). Under this regulation, if information discovered in a background check prevents a candidate from being hired, employers are required to provide candidates with a notice explaining why that ‘adverse action’ was taken. The same law applies to current employees who are terminated or denied a promotion.

Companies have many obstacles to overcome throughout the hiring process. Utilizing the tools of a reputable, professional screening company can help you navigate through these federal laws and growing trends.

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