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									                    HIRING AN EMPLOYEE: A RESUME FOR SUCCESS
                         OR AN APPLICATION FOR DISASTER?


                                     Timothy D. Ammons
                                   Cowles & Thompson, P.C.

I.       Introduction

       Very few aspects of business in the U.S. are more heavily regulated than employment.
The laws and regulations that govern employment prohibit employers from discriminating
against certain groups of individuals as well as taking other actions that may have an adverse
impact on a particular group or groups of candidates or employees.

        Throughout the recruiting, interview, and hiring process, you must be aware of the laws
that govern your actions. Asking the wrong question or making the wrong statement at the
wrong time could be interpreted as discriminatory. This paper outlines hiring tips and provides a
look at some questionable questions, all of which will make you more aware of possible trouble
spots in an interview. Many employers feel that so many laws make the overall recruitment
process a restrictive one. In fact, it is not. The intent of these laws is to ensure that employers
are focusing on job qualifications and not taking into account other information that is
discriminatory. If you are focusing on bona fide occupational qualifications (BFOQs) when you
are interviewing, you are well within the law.

       It is also important to keep good records. Creating job specifications at the front end and
documenting your decision making process at the back end are two things you can do to protect
yourself and the company in the event a decision is ever challenged.

II.      Employment Discrimination Law

         A.       Employers Face Compliance With a Myriad of Employment Laws

        Employment Discrimination laws seek to prevent discrimination based on race, sex,
religion, national origin, physical disability, and age by employers. There is also a growing body
of law preventing or occasionally justifying employment discrimination based on sexual
orientation. Discriminatory practices include bias in hiring, promotion, job assignment,
termination, compensation, and various types of harassment. The main body of employment
discrimination- laws is composed of federal and state statutes. The United States Constitution
and some state constitutions provide additional protection where the employer is a governmental
body or the government has taken significant steps to foster the discriminatory practice of the
employer. For the purposes of our lecture, we will only focus on the major federal civil rights

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        Depending upon the size of its workforce and the type of business conducted, a typical
company must comply with a number of federal and state employment laws. Each containing
rights for employees and potential liability to employers for non-compliance. Some of the
federal laws include:

•        Title VII of Civil Rights Act of 1964
•        Civil Rights Act of 1991
•        Americans with Disabilities Act of 1990 (ADA)
•        Family and Medical Leave Act of 1993
•        Rehabilitation Act of 1973
•        Equal Pay Act of 1973
•        Age Discrimination in Employment Act (ADEA)
•        Uniformed Services Employment and Re-employment Rights Act of 1994
•        Crime Control Act of 1968
•        Older Workers Benefit Protection Act of 1990
•        Executive Order 11246
•        Immigration Reform and Control Act of 1986 (IRCA)
•        Illegal Immigration Reform and Immigration Responsibility Act of 1996 (IRAIRA)
•        Pregnancy Discrimination Act of 1978
•        Fair Labor Standard Act (FLSA)
•        National Labor Relations Acts (NLRA)
•        Employee Polygraph Protection Act of 1988
•        Vietnam Era Veterans Readjustment Assistance Act of 1974
•        Walsh Healy Government Contracts Act
•        Occupational Safety and Health Act (OSHA)
•        Fair Credit Reporting Act (FCRA)
•        Worker Adjustment and Retraining Notification Act (WARN)
•        Consolidated Omnibus Budget Reconciliation Act (COBRA)
•        Health Insurance Portability and Accountability Act of 1996 (HIPAA)
•        Drug-Free Workplace Act of 1988
•        Department of Transportation Regulations on Drug Testing
•        Veterans Re-employment Rights Act
•        Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (New Hiring
         Reporting Act)
•        Employee Retirement Income Security Act of 1974 (ERISA)

        Title VII of the Civil Rights Act of 1964 prohibits discrimination in many more aspects
of the employment relationship. It applies to most employers engaged in interstate commerce
with more than 15 employees, labor organizations, and employment agencies. The Act prohibits
discrimination based on race, color, religion, sex or national origin. Sex includes pregnancy,
childbirth or related medical conditions. It makes it illegal for employers to discriminate in
hiring, discharging, compensation, or terms, conditions, and privileges of employment.
Employment agencies may not discriminate when hiring or referring applicants. Labor
Organizations are also prohibited from basing membership or union classifications on race,
color, religion, sex, or national origin.

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          B.      Trends For The Year 2001 and Beyond

       The mainstream media devotes significant coverage to employment claims as evidenced
by such front-page coverage of sexual harassment (e.g., testimony of Anita Hill at confirmation
hearings for Justice Clarence Thomas; Paula Corbin Jones’ lawsuit against President Clinton;
Tailgate investigation by Navy regarding sexual harassment in military). The fairly recent
Texaco case on racial discrimination and large settlement made with the EEOC received
prominent press and TV coverage.

        Employees are exposed to this in-depth coverage as they watch news broadcasts or read
newspapers. Once employees become aware of the type of claims that can be made and
encouraged by the results they see in the press, employees tend to be less reluctant in filing
similar employment claims when the employee believes that an employment decision has been
made for unlawful reasons.

          Employers can expect liability exposure to increase in the following “high profile” areas:

•      Age Claims: An aging workforce no longer subject to mandatory retirement at a preset age
       forces employers to carefully consider the factor of age in any layoff, downsizing and
       termination decisions. Age discrimination claims will increase as the “baby boomer”
       generation ages and is replaced by the “X” generation.

•      Sexual Harassment: These claims have increased tremendously over the last decade and will
       continue to do so for the immediate future. Recent U.S. Supreme Court decisions make it
       imperative that a company have a well-defined policy and complaint procedures in place to
       lessen exposure to liability resulting from actions of its supervisors.

•      Disability/FMLA Leave Issues: The inter-working of the ADA, FMLA and state worker’s
       compensation laws make compliance in this are complex and hazardous in making
       employment decisions based on poor absenteeism or inability to reasonably accommodate a

•      Race: Race will continue to rise, as the workforce becomes more diverse.

•      Workplace Privacy Rights: Necessary pre-employment screening programs such as
       background checks, drug testing, reference checks, honesty/personality testing and post-
       employment procedures dealing with searches of employee’s personal property, monitoring
       e-mails and telephone conversations and disclosure of personnel files to third parties will
       continue to breed complicated privacy issues.

III.      Employment Applications

        With an increase in negligent hiring, retention, and defamation lawsuits; spiraling
recruitment and training costs, and an upsurge in workplace violence and theft, more employers

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feel that they have a right to know as much as possible about every job applicant and employee.
Coupled with the fact that survey companies are now reporting that as many as 30 percent to 50
percent of all job applicants either lie or embellish facts on employment applications and during
personal interviews, the need to investigate and confirm individual employment data seems to be
even more important.

        However, in an effort to appropriately balance an employer’s "need to know" with an
employee’s privacy and equal employment opportunity rights, many federal and state laws
regulate the type and amount of information that employers may obtain. Therefore, employers
that are interested in conducting background investigations must be fully aware of each law’s
specific requirements and must tailor their employment practices accordingly or else risk the
financial sting of stiff penalties.

         A.       "What can’t I ask?" and "Why?"

        An employer should be aware of state and federal guidelines when interviewing. What
may seem to be innocent questions, asked in good faith, can leave your organization open to
costly and time-consuming charges of discrimination.

        For example, you should NOT ask questions about an applicant’s typing ability unless
typing is a requirement for the job to be filled. Also, you should ask the same questions of men
that you ask of women, and make the same inquiries of minority applicants that you make of

       If the information is needed for post-employment purposes (e.g., withholding tax), but
NOT to determine qualifications for a job, this information should be obtained after the applicant
has been hired. Such questions include date of birth, arrests, record of garnishments, etc.

        The following represent general guidelines you should follow when interviewing
potential job candidates.

                               It's Potentially
                                                            Examples of
Category                       Discriminatory to Ask (or
                                                            Acceptable Inquiries
Physical Characteristics            • Height                   • Lifting ___ lbs. is an
                                    • Weight                      essential job function.
                                    • Color of hair, eyes,        Can you do that with
                                        etc.                      or without reasonable
                                    • Disabilities or             accommodation?
                                        medical problems
Work Experience                     • Have you ever filed a    • Work experience
                                        discrimination         • Why did you leave a
                                        charge?                   job?
                                                               • Duties and

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                                                      •   How did you get along
                                                          with your supervisor?
                                                      •   What did you like most
                                                          about the job? Least?
Name                    •   Have you ever             •   What is your name?
                            changed your name?        •   Nickname?
                        •   Original name of          •   Have you ever been
                            applicant whose name          employed under
                            has been legally              another name?
                            changed                   •   Is there any additional
                                                          information about
                                                          nicknames or name
                                                          change we need to
                                                          know regarding your
                                                          application for this
Residence               •   Do you own/rent your      •   Applicant's place of
                            place of residence?           residence
                                                      •   Length of applicant's
                                                          residence in this area
Creed and Religion      •   Applicant's religious     •   None
                        •   Religious holidays
                            observed by the
                        •   Do you attend
Race or Color           •   Applicant's race          •   None
                        •   Color of applicant's
Age                     •   Age                       •   Are you below (the
                        •   Date of birth                 minimum age for
                        •   Date graduated from           working in your state?)
                            high school/college       •   If hired, can you
                                                          furnish proof of age?
Education            Education requirements that      •   School attended
                     are not job-related (e.g., you   •   Grade point average
                     can't reject applicants for      •   Percent of educational
                     laboring jobs because they           expenses paid by
                     don't have a high school             applicant
                     education; or because they       •   Career goals in
                     have a college degree and            reference to academic
                     therefore are "overqualified."       background

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Citizenship              •   What is your             •   Are you currently
                             citizenship?                 legally authorized to
                         •   Are you a U.S.               work in the United
                             citizen?                     States?
                                                      •   All applicants must
                                                          present proof of
                                                          identity and eligibility
                                                          to work in the U.S.
National Origin          •   Applicant's national     •   Applicant's
                             origin, descent,             membership in
                             lineage, parentage or        professional, trades or
                             nationality                  service organizations
                         •   Nationality of               (except those that
                             applicant's parents          would reveal
                         •   Comments about a             information about an
                             person's accent              applicant's race,
                                                          religion, etc.)
Sex/Sexual Orientation   •   Sex of applicant         •   No acceptable
                         •   Applicant's sexual           inquiries unless unless
                             habits or orientation        sex is a bona fide
                         •   Views on women's             occupational
                             liberation                   qualification (valid,
                                                          job-related inquiries in
                                                          to an applicant's
                                                          personal life should be
                                                          done in a background
Marital Status           •   Marital status           •   Are there any reasons
                         •   Marriage plans               why you could not
                         •   Name of spouse               relocate (if
                         •   Birth control                applicable)?
                             measures                 •   Are there any
                         •   Number of                    difficulties in your
                             dependents                   traveling away from
                         •   Ages of dependents           home overnight (if
                         •   Child care                   applicable)?
                             arrangements             •   How often were you
                         •   Prior married name           late (or did you leave
                         •   How spouse feels             early)?
                             about applicant's        •   How would this job
                             working, relocating,         affect your current
                             traveling out of town,       lifestyle? Do you see
                             etc.                         any detrimental
Criminal Record          •   Arrest record            •   Number and kinds of

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                                                                      convictions for
    Note: Recent rulings have held that you cannot reject an applicant solely because he/she
    has been convicted of a felony, unless the crime is job-related to the position for which
    the person is applying. For example, you cannot reject an applicant for an accounting
    position solely on the basis of a conviction for draft evasion. You could reject the
    applicant if the conviction were for embezzlement or theft.

         B.       Applicant Screening Must Be Nondiscriminatory

       Employers must be very careful about the questions that they ask (on application forms,
over the telephone, or in job interviews) before an offer of employment has been made. Federal
law requires employers to conduct the applicant screening and hiring process in a
nondiscriminatory manner. According to the U.S. Supreme Court (in Griggs v. Duke Power Co.,
401 U. S. 424 (1971)), pre-employment inquiries are discriminatory if they satisfy the following
two-prong test:

         • The inquiry tends to affect members of a protected class differently than it does
         other applicants; and

         • The inquiry is not justified by a bona fide occupational qualification (BFOQ) or
         business-related job necessity.

        Accordingly, the Equal Employment Opportunity Commission (EEOC) cautions that pre-
employment inquiries concerning an applicant’s age, race, color, religion, national origin, or
disability may be regarded as evidence of discrimination.

         C.       Will yours get you in trouble?

       Employment applications can be a great tool for hiring the right applicant. But they can
also get you in trouble. At least one court, has ruled that an employment application that asks
medical-related questions can expose an employer to liability under the Americans with
Disabilities Act (ADA) – even if the applicant who answers the questions is not disabled! The
applicant in Griffin v. Steeltek Inc. had been asked whether he (1) had ever received workers’
compensation or disability income payments, and (2) had any "physical defects" which would
prevent him from performing some jobs. When he didn’t get the job, he sued the employer,
claiming that the questions violated the ADA. The employer argued that since the applicant was
not disabled, he had no right to sue under the ADA. The court disagreed, holding that an
applicant who is asked illegal questions may get compensatory and punitive damages, attorney
fees and equitable relief (for example, the job he was denied).

        Although not all courts agree, the Griffin case points out the risks inherent in the job
application process. Asking the wrong question, even if it is asked in good faith, can expose you
to legal liability. And the laws have changed so much that questions that were "safe" 10 years

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ago should no longer be asked. The questions asked in the Griffin case, for example, were
routinely asked prior to the passage of the ADA.

        Does this mean you shouldn’t ask applicants to complete an application? Certainly not.
An appropriate employment application serves several valuable functions, not the least of which
is to get a good sense of the applicant’s employment history. In addition, if you are seeking
references from the applicant’s previous employers, a signed application containing an
appropriate release may encourage former employers to release the desired information. The
release can also serve as a defense to any lawsuit an applicant might bring claiming the
organization invaded his or her privacy by conducting the reference checks. Moreover, a signed
application containing a clear employment-at-will statement makes it more difficult for an
employee to later bring a breach of contract lawsuit if he or she is terminated. You can also help
prevent or defend wrongful discharge claims by including a statement on the application
notifying an applicant that if any information on the application is found, after hire, to be false or
misleading, it will be grounds for termination.

         In order to protect yourself, you should carefully review your application. As a general
rule, if you seek information from an applicant, it will be assumed that you used the information
in making the hiring decision. For example, asking for the years that an applicant attended high
school or college will give you a good indication of the applicant’s age. To avoid a claim that an
applicant was not hired once you found out how old he or she was, do not ask for this (unless, of
course, there is a legitimate reason for asking, such as to verify that the applicant graduated from
a particular school).

          The best rule of thumb: If you don’t need the information prior to hire, don’t ask
for it.

                  1.    Applicant Fraud: Don’t be a Victim

         An alarming number of job candidates stretch the truth when providing background and
employment related information to potential employers, according to a recent survey of 850
human resource professionals. In a poll conducted by the Society for Human Resource
Professionals (SHRM), more than half of the respondents who verify candidate information
reported that they regularly uncover mistruths about length of employment, salaries, former
titles, and degrees.

          To keep your organization from becoming a victim of applicant fraud, here are some
    •     Develop a written policy. The policy should say that misstatements and omissions about
          work background and education are grounds for dismissal whenever discovered. If you
          discover falsified information during the hiring process, that applicant is generally
          dropped from consideration. In the case of a long-term employee who has performed
          well, some employers opt for a lesser penalty.
    •     Use an application form. All job candidates should fill out an application form.
          Outplacement agencies often review resumes, helping applicants present themselves in

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          the best possible light. An application form presents a more honest picture and can get at
          additional information that is not included on a resume.
      •   Get a release. Have applicants sign an authorization allowing you to verify past
          employment and all other information. The form can be faxed to past employers and
          signing it also reminds applicants that lying is serious.
      •   Ask about rehire. Ask past employers whether they would rehire the candidate. A "no"
          is a warning and merits further investigation.
      •   Get help from applicants. Have job candidates identify references and inform them that
          you will be calling. With references from past employers, in addition to the names of
          former managers or supervisors, ask for the names of colleagues who were at the
          candidate’s same level and below.
      •   Document. Protect yourself against claims of "negligent hiring" by documenting your
          efforts to verify candidates’ background. If you hire an individual with a history of
          violence, for example, and he or she later harms others on the job, you could be liable if
          you failed to do an employment or background check.
      •   Check gaps. Gaps in employment or a large number of jobs over a short period may
          suggest problems. While often legitimate, the term "consultant" may sometimes be
          concealing periods out of work.
      •   Question explanations. When candidates say they were reorganized or downsized out
          of a job, ask why they did not fit into the new organization.
      •   Check all degrees and licenses. Most colleges will verify attendance and degrees by
      •   Don't jump to conclusions. If you discover conflicting information, ask the applicant
          about it. There may be an explanation.

          Final tips

      Don’t offer any applicant a job until all reference and background checks have been
completed. If time is an issue, consider hiring a reference checking firm.

        Finally, while thorough and accurate checks are an important tool, delving too deeply
into a candidate’s private life can carry its own legal risks. A good rule of thumb? Stick to
going after job-related information.

IV.       The Americans with Disabilities Act

          A. Background

        In the past, some employment applications and interviews requested information about an
applicant's physical and/or mental condition. This information was often used to exclude
applicants with disabilities before their ability to perform the job was even evaluated. As a
result, Congress established a process within the ADA to isolate an employer's consideration of
an applicant's non-medical qualifications from any consideration of the applicant's medical

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         B. Statutory and Regulatory Framework

        Under the law, an employer may not ask disability-related questions and may not conduct
medical examinations until after it makes a conditional job offer to the applicant. This helps
ensure that an applicant's possible hidden disability (including a prior history of a disability) is
not considered before the employer evaluates an applicant's non-medial qualifications. An
employer may not ask disability-related questions or required a medical examination pre-offer
even if it intends to look at the answers or results only at the post-offer stage.

        Although employers may not ask disability-related questions or require medical
examinations at the pre-offer stage, they may do a wide variety of things to evaluate whether an
applicant is qualified for the job. Once a conditional job offer is made, the employer may ask
disability-related questions and require medical examinations as long as this is done for all
entering employees in that job category. If the employer rejects the applicant after a disability-
related question or medical examination, investigators will closely scrutinize whether the
rejection was based on the results of that question or examination. If the question or examination
screens out an individual because of a disability, the employer must demonstrate that the reason
for the rejection is "job-related and consistent with business necessity." [42 U.S.C. §12112(b); 20
C.F.R. §§1630.10, 1630.14(b)(3)].

        In addition, if the individual is screened out for safety reasons, the employer must
demonstrate that the individual poses a "direct threat." This means that the individual poses a
significant risk of substantial harm to him/herself or others, and that the risk cannot be reduced
below the direct threat level through reasonable accommodation. [42 U.S.C. §12113 (b); See 29
C.F.R. pt. 1630 app. § 1630.2(r)].

        Medical information must be kept confidential. The ADA contains narrow exceptions for
disclosing specific, limited information to supervisors and managers, first aid and safety
personnel, and government officials investigating compliance with the ADA. Employers may
also disclose medical information to state workers' compensation offices, state second injury
funds, or workers' compensation insurance carriers in accordance with state workers'
compensation laws and may use the medical information for insurance purposes.

         C. Pre-employment Inquiries

                  1.    Permissible
    An Employer may ask a job applicant:
             1. About his/her ability to perform specific job functions, tasks, or duties, as long as
                these questions are not phrased in terms of a disability;
             2. To describe or demonstrate how he/she will perform a job, with or without an

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             3. With a known disability that might interfere with or prevent performance of job
                functions to describe or demonstrate how he/she will perform a job, with or
                without an accommodation, even if this is not required of other applicants;
             4. With a known disability that would not interfere with or prevent performance of
                job functions to describe or demonstrate how he/she will perform a job if this is
                required of all other applicants;
             5. How he/she would perform the job with an accommodation, and with what
                accommodation, if the applicant has indicated an accommodation would be
             6. Whether he/she is currently using alcohol or illegal drugs.

                  2.    Impermissible
     An Employer may not ask a job applicant:

             1. Whether he/she has a disability;
             2. About the nature, severity, or cause of the disability;
             3. About the prognosis or expectations regarding the disability;

             4. Whether he/she will need treatment or special leave because of the disability;
             5. To take a medical examination or answer any medical inquiries regarding a
                disability prior to making a conditional offer of employment;
             6. Whether he/she is a drug addict or alcoholic, or whether he/she has even been
                in a drug or alcohol rehabilitation program;
             7. About his/her workers’ compensation history before making a conditional
                offer of employment.

V.       Using Consumer Reports

        Credit reports are gaining popularity with employers faced with the task of recruiting
honest, reliable employees. Some employers use credit reports to screen applicants for sensitive
positions, such as cashiers or couriers. Other employers use credit reports to give them a general
indication of an applicant's financial honesty and personal integrity. But many employers may
not know that a federal law, the Fair Credit Reporting Act (FCRA), governs their use of credit
reports. This overview briefly explains the FCRA and then describes how you, as an employer,
can use credit reports. It also discusses your legal responsibility under the FCRA to notify
applicants if information in their credit reports influenced your decision not to hire them.

       The Act, The FCRA, which has been in effect since 1971, is designed to protect the
privacy of information in credit reports and to ensure that information supplied by credit bureaus
about consumers is as accurate as possible. The law specifically permits credit bureaus to release
to employers credit reports for employment purposes. While the FCRA does not supersede fair
employment laws, it allows employers to review credit records for the purpose of evaluating
anyone they may hire, promote, reassign, or retain, consistent with other laws. The Disclosure
Notice when a decision to deny employment is based on information in a credit report, the

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employer must disclose this fact to the applicant -- along with the name and address of the credit
bureau making the report. This is important because some credit reports may contain errors.
The disclosure notice allows an applicant to obtain a free copy of the credit report and check it
for accuracy and completeness. The disclosure is required even if credit-report information was
not the main reason the applicant was turned down. It may have played a small part in the
overall decision, but the applicant still must be notified. The disclosure requirement also pertains
to any current employee who applies (and is turned down) for a new position or whose
employment is terminated because of information in a credit report.

       As an employer, you may use consumer reports when you hire new employees and when
you evaluate employees for promotion, reassignment, and retention — as long as you comply
with the Fair Credit Reporting Act (FCRA). Sections 604, 606, and 615 of the FCRA spell out
your responsibilities when using consumer reports for employment purposes.

        The FCRA is designed primarily to protect the privacy of consumer report information
and to guarantee that the information supplied by consumer reporting agencies is as accurate as
possible. Amendments to the FCRA — which went into effect September 30, 1997 —
significantly increase the legal obligations of employers who use consumer reports. Congress
expanded employer responsibilities because of concern that inaccurate or incomplete consumer
reports could cause applicants to be denied jobs or cause employees to be denied promotions
unjustly. The amendments ensure (1) that individuals are aware that consumer reports may be
used for employment purposes and agree to such use, and (2) that individuals are notified
promptly if information in a consumer report may result in a negative employment decision.

         A.       What is a Consumer Report?

       A consumer report contains information about your personal and credit characteristics,
character, general reputation, and lifestyle. To be covered by the FCRA, a report must be
prepared by a consumer-reporting agency (CRA) — a business that assembles such reports for
other businesses.

       Employers often do background checks on applicants and get consumer reports during
their employment. Some employers only want an applicant's or employee's credit payment
records; others want driving records and criminal histories. For sensitive positions, it's not
unusual for employers to order investigative consumer reports — reports that includes interviews
with an applicant's or employee's friends, neighbors, and associates. All of these types of reports
are consumer reports if they are obtained from a CRA.

        Applicants are often asked to give references. Whether verifying such references is
covered by the FCRA depends on who does the verification. A reference verified by the
employer is not covered by the Act; a reference verified by an employment or reference checking
agency (or other CRA) is covered. Section 603(o) provides special procedures for reference
checking; otherwise, checking references may constitute an investigative consumer report
subject to additional FCRA requirements.

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         B.       Key Provisions of the FCRA Amendments Written Notice and Authorization.

       Before you can get a consumer report for employment purposes, you must notify the
individual in writing — in a document consisting solely of this notice — that a report may be
used. You also must get the person's written authorization before you ask a CRA for the report.

Adverse Action Procedures.

       If you rely on a consumer report for an "adverse action" — denying a job application,
reassigning or terminating an employee, or denying a promotion — be aware that:
    Step 1: Before you take the adverse action, you must give the individual a pre-adverse
    action disclosure that includes a copy of the individual's consumer report and a copy of
    "A Summary of Your Rights Under the Fair Credit Reporting Act" — a document
    prescribed by the Federal Trade Commission. The CRA that furnishes the individual's
    report will give you the summary of consumer rights.
    Step 2: After you've taken an adverse action, you must give the individual notice —
    orally, in writing, or electronically — that the action has been taken in an adverse action
    notice. It must include:
           n the name, address, and phone number of the CRA that supplied the report;
           n a statement that the CRA that supplied the report did not make the decision to
               take the adverse action and cannot give specific reasons for it; and
           n a notice of the individual's right to dispute the accuracy or completeness of any
               information the agency furnished, and his or her right to an additional free
               consumer report from the agency upon request within 60 days.
In Practice...
   • You advertise vacancies for cashiers and receive 100 applications. You want just credit
       reports on each applicant because you plan to eliminate those with poor credit histories.
       What are your obligations?
    You can get credit reports — one type of consumer report — if you notify each applicant
    in writing that a credit report may be requested and if you receive the applicant's written
    consent. Before you reject an applicant based on credit report information, you must
    make a pre-adverse action disclosure that includes a copy of the credit report and the
    summary of consumer rights under the FCRA. Once you've rejected an applicant, you
    must provide an adverse action notice if credit report information affected your decision.
    •    You are considering a number of your long-term employees for a major promotion. You
         want to check their consumer reports to ensure that only responsible individuals are
         considered for the position. What are your obligations?
    You cannot get consumer reports unless the employees have been notified that reports
    may be obtained and have given their written permission. If the employees gave you
    written permission in the past, you need only make sure that the employees receive or
    have received a "separate document" notice that reports may be obtained during the
    course of their employment — no more notice or permission is required. If your
    employees have not received notice and given you permission, you must notify the
    employees and get their written permission before you get their reports.

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    In each case where information in the report influences your decision to deny promotion,
    you must provide the employee with a pre-adverse action disclosure. The employee also
    must receive an adverse action notice once you have selected another individual for the
    •    A job applicant gives you the okay to get a consumer report. Although the credit history
         is poor and that's a negative factor, the applicant's lack of relevant experience carries
         more weight in your decision not to hire. What's your responsibility?
    In any case where information in a consumer report is a factor in your decision — even if
    the report information is not a major consideration — you must follow the procedures
    mandated by the FCRA. In this case, you would be required to provide the applicant a
    pre-adverse action disclosure before you reject his or her application. When you
    formally reject the applicant, you would be required to provide an adverse action notice.
    •    The applicants for a sensitive financial position have authorized you to obtain credit
         reports. You reject one applicant, whose credit report shows a debt load that may be too
         high for the proposed salary, even though the report shows a good repayment history.
         You turn down another, whose credit report shows only one credit account, because you
         want someone who has shown more financial responsibility. Are you obliged to provide
         any notices to these applicants?
    Both applicants are entitled to a pre-adverse action disclosure and an adverse action
    notice. If any information in the credit report influences an adverse decision, the
    applicant is entitled to the notices — even when the information isn't negative.

        There are legal consequences for employers who fail to get an applicant’s permission
before requesting a consumer report or who fail to provide pre-adverse action disclosures and
adverse action notices to unsuccessful job applicants. The FCRA allows individuals to sue
employers for damages in federal court. A person who successfully sues is entitled to recover
court costs and reasonable legal fees. The law also allows individuals to seek punitive damages
for deliberate violations. In addition, the Federal Trade Commission, other federal agencies, and
the states may sue employers for noncompliance and obtain civil penalties.

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VI.      Tips to Prevent Civil Rights Claims
       In order to reduce the likelihood that they will be charged with discrimination, employers
should take precautionary measures in managing their workforce.

Posting Notices

      Employers subject to Title VII are required to post conspicuous notice regarding the
employer’s prohibition of discrimination.


       Establish a diversity training program to raise awareness of diversity issues in the
workplace. In the event of a discrimination lawsuit, evidence of a mandatory diversity training
program is an excellent means of establishing an employer’s good-faith efforts to prevent
discrimination in the workplace.


       Discipline employees consistently, regardless of race, and maintain thorough
documentation of any disciplinary measures taken. Ensure that all staff and supervisors comply
with and consistently apply established company human resources policies and procedures
regarding discipline; failure to do so can be used as evidence of discrimination.

       Take immediate and reasonable steps to stop any discriminatory conduct by supervisors
or other employees. For example, speak directly with the individuals who are engaging in
discriminatory conduct, warn them that such conduct is unacceptable and, if the discriminatory
conduct is severe, consider taking formal disciplinary action.


       Conduct a thorough investigation prior to any final decision to discharge any employee
for poor performance or misconduct. The investigation should be conducted by someone who
has knowledge of the applicable anti-discrimination laws and who is not the employee’s
immediate supervisor. For example, prior to discharging an employee a human resources
representative should talk to everyone who has knowledge of the facts, including the employee,
and determine that there is no bias in the decision to discharge and, perhaps more important that
other employees with similar performance or conduct issues have not received more favorable

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Hiring Checklist

The following checklist may be useful in evaluating your company’s hiring practices and
spotting areas for refinement.

         • Do you have a written policy concerning candidate selection?
         • Is the policy reviewed at least annually to determine whether it is meeting your goals?
         • Is the selection process coordinated with policies concerning:
         —Equal opportunity?
         —Affirmative action?
         —Applicant flow?
         —Employment planning?
         —Immigration law compliance?
         —Pre-employment testing?
         —Interviewing questions?
         —Applicant sourcing?
         —Employment agencies?
         —Employment physicals?
         —Reference checks?
         • Are at least two persons involved in candidate selection?


         • Have your employment selection methods been validated?
         • Is the same selection method applied to each candidate for the same job?
         • Is the selection method tailored for the specific job (i.e., typing tests for typists, addition
         tests for bookkeepers)?
         • Is the process audited for compliance with applicable law?
         • Is it audited at least once a year?
         • Is there a method for rejected individuals to complain about discrimination?
         • Are applicant-flow records analyzed for evidence of discrimination?
         • Does the selection process rely on as many objective criteria as possible?
         • If you prefer to hire from within, are you confident that such promotions do not
         discriminate against minorities not represented in your workforce?
         • Has an attorney reviewed the selection process for compliance with discrimination

       • Have you trained your interviewers?
       • Do you provide written instructions to your interviewers?
       • Are references checked before the interview?
       • Is the application reviewed for completeness prior to the interview?

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         • Are all interview questions job related?
         • Do your interviewers make contemporaneous notes of the interview?
         • Do your interviewers rate applicants based on job-related categories?
         • Are questions by interviewers open-ended?
         • Are yes/no questions typically avoided by your interviewers?
         • Do the interviewers use a job analysis to aid them in asking job-related questions?
         • Are behaviorally anchored rating scales used to evaluate the applicants?
         • Are interview rating sheets designed for the particular job?
         • Do you remind interviewers to avoid such common errors as:
         —Halo effect?
         —"Similar to me" phenomena?
         • Do your interviewers use situational questions?
         • Are interviewers trained to obtain objectively observable evidence (e.g., neat and clean
         appearance rather than personal appearance)?

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