Use of Background Checks in the Hiring Process and Workplace

The Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., regulates the collection, dissemination, and use of consumer reports for employment purposes. Congress enacted the statute to protect job applicants and employees from unfair, inaccurate, or undisclosed background screening practices, and to safeguard personal privacy when employers rely on third-party consumer reporting agencies.

When an employer obtains or uses a consumer report for hiring, promotion, retention, or termination decisions, the FCRA imposes strict, sequential obligations designed to ensure transparency, accuracy, and a meaningful opportunity for the individual to respond before adverse action is taken.

1 – Disclosure and Authorization

Before procuring a consumer report for employment purposes, an employer must:

1. Provide a written disclosure to the applicant or employee
2. Obtain the individual’s written authorization to procure the report

These requirements are intended to protect privacy and informed consent, ensuring individuals understand that sensitive personal information will be obtained and used in connection with employment.

2 – Pre-Adverse Action Requirements

If an employer intends to take an adverse action (such as deny you the job, withdraw a job offer, or fire you) based in whole or in part on a consumer report, the employer must first provide a pre-adverse action notice.

Before the adverse action occurs, the employer must give the individual:

1. A copy of the consumer report, and
2. A copy of the “Summary of Rights Under the FCRA.”

The Pre-Adverse Action Notice allows the individual to:

• Review the report,
• Identify inaccuracies, incomplete or misleading information,
• Dispute errors with the consumer reporting agency,
• Provide explanation or mitigating context to the employer,
• Attempt to preserve the employment opportunity.

Critically, the employer must wait a reasonable period of time after providing these materials before taking final adverse action. Courts routinely recognize that notice provided simultaneously with or after termination or rejection does not satisfy the statute.

3 – Accuracy and Reasonable Procedures

The FCRA also imposes substantive accuracy obligations:

• Consumer reporting agencies must follow reasonable procedures to assure maximum possible accuracy of consumer reports.
• Individuals have the right to dispute inaccurate or incomplete information, triggering reinvestigation obligations.

In the employment context, misleading or incomplete criminal or background information can be actionable even if technically “true,” because the FCRA is concerned with how information is presented and understood by users.

Congress provided protections to individuals who suffer FCRA violations.  We may be able to help you recover actual damages, statutory damages, or punitive damages.

If you have been denied a job because of a background check, contact us, we will have an experienced attorney evaluate your claim and help determine if you have a case.