Texas Employment Law Update : Texas Employment Lawyer & Attorney : Russell D. Cawyer : Kelly Hart & Hallman Law Firm : Dallas TX Labor Updates

Many employers understand the need for having a neutral reference policy (i.e., a policy whereby only dates of employments, positions held and sometimes last salary is disclosed). The policies help prevent and defend against potential defamation claims by former employees. Last week, I attended a panel discussion on Post Employment Conduct by Employers and Employees:  Not the Time to Let Your Guard Down at the ABA 5^th Annual Labor and Employment Law Conference. 

During conference, Jeffrey Shane of Allison & Taylor made an interesting presentation on the services his company provides. Allison & Taylor specializes in conducting personalized reference checks. One aspect of the company’s business is conducting reference checks on behalf of applicants who believe they are getting negative references from their prior employers and supervisors. The company boasts over 300 attorneys with whom they’ve worked and a 100 percent success rate in stopping untruthful negative references that they discover.

So, if you are an employer that has a negative reference policy, or a supervisor working at a company with such a policy, beware. If you are not following the policy, every reference check you get may not necessarily be on behalf of a genuine prospective employer and may instead be being used to establish evidence for a defamation claim.  Remember, defamation claims are one of the relatively few employment law claims where supervisors can sued and held individually liable.  Thumper said it best, "If you can't say something nice, don't say nothin' at all."

Follow me on Twitter @RussellCawyer.

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Recently I wrote about ADP's 12th Annual Screening Index summarizing employment screening and hiring trends.  Employers using third-party background screening services must remember to comply with the Fair Credit Reporting Act's (FCRA) procedures prior to using consumer reports, in whole or in part, employment taking employment actions.  Moreover, while Texas has no specific statutes governing use of consumer reporting information in the employment context, some states have laws or regulations imposing more restrictive requirements than the FCRA that must also be followed.

In summary, the FCRA requires employers using consumer reports (i.e., information about your personal and credit characteristics, character, general reputation, and lifestyle) to:

• Disclose, in writing, your intent to obtain consumer reporting information before requesting the information;
• Obtain written authorization to obtain the consumer reporting information before requesting the report;
• Prior to taking an adverse employment action, provide the applicant/employee with pre-adverse action notification containing a copy of the report and a summary of rights under the consumer reporting act;
• After taking the adverse employment action, provide the applicant/employee with post-adverse action notification that contains the name and contact information of the consumer reporting agency (CRA) that prepared the report; a statement that the CRA did not make the decision and advising the individual of his or her right to dispute the information in the report with the CRA within 60 days.

Background checks and pre-employment screening are effective tools to use in hiring qualified employees.  Doing so,  however, without understanding an employer's obligations under state and federal law, can give rise to liability. The Federal Trade Commission enforces the FCRA.  For more information on an employer's rights and obligations under the FCRA, click here.

Earlier: Annual Survey of Employment Screening and Hiring Trends Released.

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This month ADP released its 12th Annual Screening Index report summarizing its evaluation of employment screening and hiring trends.  The summary was gleaned from nearly 5.5. million individual background checks and 1.7 million criminal background checks performed during calender year 2008.  The Screening Index:noted several interesting data points:

• Nine percent of background checks contained an adverse record (concerning criminal history, credit and driving records).
• Forty-six percent of reference and credential verifications revealed a discrepancy between information provided by candidates and what the screening revealed on employment, education and/or reference checks.
• More than one-third (37 percent) of driving record checks showed “one or more violation(s) or conviction(s).”
• Approximately six percent of the criminal record checks revealed a criminal record within the last seven years (out of 1.7 million checks performed).  

Because employers utilize background screens to identify appropriate candidates for employment; confirm the veracity of information provided on employment applications and as part of a comprehensive strategy of maintaining a safe workplace, the ADP summary provides interesting information about the American workforce --on a macro level. A copy of the full report can be downloaded here (must provide ADP with some identifying information prior to download).

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