Posted by & filed under Legal News and Compliance.

The FCRA has specifically defined rules for the use of background checks in the hiring process.  These are basic requirements for every applicant that companies must follow.


Recently, a major U.S. home improvement company has had a class action lawsuit filed against them for alleged violations of the FCRA.  The violations, as stated in the complaint, include performing background checks without notifying employees and job applicants, as well as failing to give them copies of the background checks before taking adverse action against them and then refusing them employment based on the results.

The FCRA requirements are basic, and should be followed by every employer.   In February of this year, the FTC and the EEOC published a join document titled, “Background Checks:  What Employers Need to Know.”  This document was provided so that companies would be able to clearly understand what the FCRA, the FTC and the EEOC requirements are for utilizing background checks in the hiring process.  It outlines all of the steps in the background check process, what is expected by the EEOC and the FTC, and how you can be in compliance with your hiring practices.

The regulations surrounding the use of background checks continue to evolve, but the basic principles surrounding background checks remains the same.  The applicant must be notified, provide consent, and be given a fair opportunity to dispute any findings that might come about via a background check.  It is important for every company to understand the FCRA requirements so that the type of class action litigation as noted above can be avoided at all costs. 

Those in charge of human resources and hiring should understand all applicant local, state and federal laws surrounding hiring and the use of background checks prior to beginning a hiring process. 

For more information on this class action lawsuit, please click here.