Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
By Kate E. Trinkle, Ogletree Deakins Nash Smoak & Stewart PC
Employers want to ensure they hire the right candidate for the role while mitigating potential negligent hiring, retention, and supervision claims. So, employers use various candidate pre-employment screening tools, including drug tests, background checks, and AI screenings. These resources can provide valuable candidate insights, but those insights often bear upon or reveal an individual’s protected characteristics, exposing employers to legal risks. Building a strong pre-employment screening process helps employers mitigate these risks.
Employers must comply with applicable federal, state, and local laws, regulations, and ordinances associated with pre-employment screenings. This includes equal employment opportunity laws, like the Age Discrimination in Employment Act, the Americans with Disabilities Act, Title VII of the Civil Rights Act, among others (“EEO laws”), and consumer-protection laws, like the Fair Credit Reporting Act (“FCRA”) and state and local variations thereof. Employers can enhance their pre-employment screening process by tailoring candidate screenings to the specific role and work environment, and any statutory or regulatory requirements that may apply, such that any screenings are demonstrably job-related and consistent with business necessity. Employers must also ensure that any screenings comply, in both timing and substance, with EEO laws, the FCRA, and jurisdiction-specific prohibitions and/or requirements. Employers should periodically review hiring data to detect and correct aspects of the pre-employment process that may disparately impact certain protected classes.
Consider Company-X, an Indiana manufacturer and drug-free workplace. Company-X is hiring a Warehouse Supervisor, a safety-sensitive position. Qualified candidates will have supervisory experience and a forklift certification. Company-X wants to screen applications using an AI platform and will require passing candidates to consent to a background check, including criminal history, credit history, and degree verification. The successful candidate must then undergo a drug test post-job offer.
Using AI may have unintended consequences for employers. Company-X should consider how the platform evaluates candidates and whether the results constitute a consumer report. If Company-X moves forward with the platform, it must ensure its use complies with EEO laws and does not disproportionately screen out members of any protected class.
Employers must also consider whether the pre-employment screening tools produce a consumer report. When a third party conducts pre-employment screenings for an employer to use to evaluate or provide information about an applicant (“consumer”) for employment purposes (hiring, retention, promotion), the results likely constitute a “consumer report” under the FCRA.
Before requesting a consumer report, employers must disclose the nature of the report to candidates and obtain their authorization. If the report includes potentially job-disqualifying information, employers must send the candidate a pre-adverse action letter, notifying the candidate that adverse action (e.g., withdrawing the conditional offer) is being considered and their legal rights, including the right to dispute the accuracy and completeness of the report with the third party (the “consumer reporting agency”), and enclosing a copy of the report and the FCRA “A Summary of Your Rights” and any other jurisdictional notices.
Then, employers must wait at least five business days after the candidate receives the pre-adverse action letter before taking any adverse action. After that “reasonable waiting period,” employers will assess the information available, including any provided by the candidate, to determine whether the results are job-disqualifying. If they are, employers must send the candidate an adverse action letter, describing the action taken and related legal rights. Although this process applies in most jurisdictions, employers must comply with jurisdictional nuances.
Employers can limit the legal exposure from screening results that reveal candidates’ protected characteristics that may not have been known at the pre-employment stage by ensuring screenings are job-related, consistent with business necessity, and appropriately timed. Starting with statutory or regulatory requirements and the job description, employers should consider the job duties and responsibilities and any required or preferred qualifications (e.g., education), licenses or certifications, and then tailor any screenings to elicit information about the candidate’s ability to perform the specific role. Although many jurisdictions have ban-the-box legislation requiring employers to conduct background checks post-offer, Indiana does not. Still, a post-offer background check remains best practice because it saves time and money and limits legal exposure.
For Company-X, the work environment and safety-sensitive nature of the Warehouse Supervisor role likely warrant a drug test and a criminal background check. But the degree verification and credit check are not job-related. By removing those checks and conducting post-offer background checks, Company-X can limit its legal exposure to one candidate instead of all and save time and money.
These foundational considerations enable employers to ensure pre-employment screenings minimize legal exposure, withstand legal challenges, and meet business needs.•
Kate E. Trinkle is an associate with Ogletree Deakins Nash Smoak & Stewart PC. She partners with employers to guide them through background check issues and other day-to-day workplace challenges. She also defends employers in various pre-litigation and litigation actions, including discrimination, harassment, retaliation, and individual and class action lawsuits under federal and state background check-related laws. Trinkle is an active IndyBar member and is a graduate of Bar Leader Class XX. She graduated with her JD from Indiana University Robert H. McKinney School of Law.
Please enable JavaScript to view this content.