Errors in background screening process and procedure can quickly lead to violations of consumer rights and subsequent costly legal actions. Recently, Cathedral Health Care Centers (CHHC) and Starbucks Corp., were served with class action lawsuits filed by job applicants who were denied employment due to background check errors.
Case Number One: IDE Management
Earlier this year, a class action lawsuit was filed against IDE Management d/b/a Cathedral Health Care Centers, in the Southern District of Indiana. She claims she was denied a nursing job based on inaccurate results from a criminal background check.
The plaintiff disputed multiple felony convictions found in the criminal history search by IDE and alleged she did not receive a copy of the consumer report or the required FCRA summary of rights prior to rejecting her job application.
“The law requires that these companies furnish reports drawn from public records for employment purposes to notify the people named in the reports in a timely manner, so any inaccuracies in the data can be challenged and that the public record is complete and up to date,” according to an article in the Indy Star.
Case Number Two: Starbucks Corp.
There was a similar issue at Starbucks. A Colorado man claimed he was denied a job based on an incorrect background check. In this compliant, it was alleged that the coffeehouse chain also did not provide him an appropriate amount of time to correct those results.
There are other cases where the Consumer Financial Protection Bureau (CFBU) fined consumer reporting agencies for reporting inaccurate information about job candidates. Back in 2015, it fined a large consumer reporting agency $2.5 million in civil penalties and another $10.5 million in relief for former applicants whose employment eligibility and reputations were also harmed.
It’s More Common Than You Think
Unfortunately, employers turn away thousands of qualified job hunters every year because of background checks that are simply wrong. According to an article written by the Associated Press (AP), “Sloppy handling of that data can cause a search on one person to turn up a rap sheet about someone with a similar name . . . Other common errors include displaying criminal records that were supposed to be sealed or wiped clean, miss-classifying minor offenses as major crimes and listing charges that have been dismissed.”
Conducting background checks requires more than a computer and Internet connection. However, some start-ups don’t offer much more than that to employers that ultimately pay the price for their inexperience or slack policies and procedures.
States are trying to fix the problem. California and others have limited employers’ ability to apply criminal history when making employment decisions.
In the meantime, make sure your background check provider is experienced, avoids shortcuts, has an excellent track record regarding accuracy, and is held accountable for errors. No one can afford to reject skilled and capable employees in this vulnerable labor market. Your company’s success and reputation depends on it.
