On April 28, the Federal Trade Commission published a blog entitled “Background Checks on Prospective Employees: Keep Required Disclosures Simple.”  In this online publication, the FTC issued guidance to employers on how to comply with the Fair Credit Reporting Act if they intend to use a consumer report (commonly referred to as a background check) on a prospective employee.  This guidance included the following: 

Disclosure

Prior to getting a background check, an employer must disclose to the applicant that the employer intends to get a background check.  It must also obtain the applicant’s written authorization to do so.  The FCRA requires this disclosure to be clear and conspicuous, consisting solely of the disclosure that a background check will be procured. 

According to the FTC, this disclosure should not use “complicated legal jargon or add … extra acknowledgements or waivers.”  For example, the FTC stated that the disclosure should not include a liability release, a certification that the job application is accurate, or any acknowledgments regarding the legality of the hiring process, to name just a few.  In the FTC’s view, the disclosure should only be a “simple, easy-to-understand notification that you will obtain a background screening report, perhaps with a simple explanation of what information will be included in the report.” 

Adverse Action

The FTC also provided guidance on the process that an employer must follow if it intends to take “adverse action” based on the background check.  Under the FCRA, before taking any adverse action based in whole or in part on a background report, the prospective employer must provide the applicant with a copy of the report and a summary of rights.   

In the FTC’s language, the obligation to deliver these disclosures is triggered if the “background screening report reveals something that may cause you to decide not to hire the person.”  Further, despite the fact that the FCRA itself does not require the employer to wait any specific period of time between the pre-adverse action disclosures and taking adverse action, the FTC suggests that the employer must give the applicant “sufficient time to review the report so they can challenge any elements that might be incorrect.”  The FTC was silent, however, on what constitutes sufficient time. 

Once an employer has waited a “sufficient time” to review the report, the employer may finalize the adverse action.  In doing so, the employer “must provide a notice to that person that states they weren’t hired due at least in part to the result of the background screening report.”