Companies that use background checks when making hiring and firing decisions are required to comply with federal and state due process laws to protect people who are fired or rejected in case the information contained in the report is false.
The federal law that governs employers' who obtain and use background checks in making hiring and firing decisions is the Fair Credit Reporting Act. Among other protections in the law, employers who make hiring and firing decisions based on background checks must first obtain authorization for the report to be made and then provide a copy of the report if it is used to reject an applicant or fire an existing employee. The reason for this is to allow the individual to review the information contained in the report to confirm it is accurate and challenge it if it is false.
Companies that violate the law may be sued in federal court and face exposure for damages including compensatory damages, punitive damages and attorney's fees.
Two examples of recent lawsuits are Saye v. CSK Auto (2:14-CV-3470 (DC CA 2014), where a group of individuals who were rejected from employment on the basis of their background check have filed suit against the company that owns O'Reilly Auto Parts seeking damages because the company allegedly did not comply with the Fair Credit Report Act's requirement that it provide affected people a copy of the report so they could challenge any inaccuracies contained in it, and Camacho v. ESA Management (14CV1089 SD CA 2014), where the operator of Extended Stay America hotels was sued by job applicants who contend that the company did not properly inform them that they would run background checks on them as part of the hiring process.
If you are rejected for a job or fired from your current job on the basis of a background check, you should call the employment lawyers of Alan Lescht and Associates, P.C., for a free consultation. If we determine that you have a valid case we will consider taking the matter on a contingency basis where fees are earned only if we obtain a recovery for you.