FTC Advises HR to Keep Required Screening Forms Simple

Disclosure and authorization forms should be free of any excess language

By Roy Maurer May 12, 2017
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Required background check disclosure and authorization forms should be clearly worded and not weighed down with "complicated legal jargon" or "extra acknowledgements or waivers," the Federal Trade Commission (FTC) said in a new nonbinding guidance.

Before obtaining a background screening report on a prospective employee, the federal Fair Credit Reporting Act (FCRA) requires that the employer disclose its intent to screen the person and that he or she provide written authorization allowing the screen to occur.

[SHRM members-only toolkit: Conducting Background Investigations]

"Companies often ask how to make the required initial disclosure before they obtain the background screening report and get the prospective employee's authorization," said David Lincicum, an attorney for the FTC based in Washington, D.C. Lincicum said that it's OK to combine the required disclosure and request for authorization in one document, but "just be sure to use clear wording that the prospective employee will understand." Some companies "trip themselves up" with overly complicated forms, he added.

"Vigorous disputes over what wording and format satisfies the FCRA have spawned innumerable lawsuits, including dozens of massive nationwide class-action lawsuits against employers of all sizes throughout the country," said Rod Fliegel, an attorney in the San Francisco office of Littler and co-chair of the firm's privacy and background checks practice group. "[Even] federal judges disagree on how to interpret the statutory mandate."

Against this backdrop, the FTC's guidance serves to remind employers that less is more when it comes to drafting background check disclosure and authorization forms.

"This is particularly helpful in light of the litigation employers face when conducting background checks and providing potentially legally deficient forms disclosing the check and capturing the job applicant's consent," said Montserrat Miller, a partner at Arnall Golden Gregory in Washington, D.C. "Examples of extraneous language include releases of liability, accuracy of information in the job application, hiring based on nondiscriminatory reasons and out-of-scope releases."

Examples of the kind of language employers should not use in the FCRA-required disclosure and authorization document include:

  • Language that claims to release the employer from liability for conducting, obtaining or using the background screening report.
  • Certification from the prospective employee that all information in the job application is accurate.
  • Language that asks the prospective employee to acknowledge that the hiring decision is based on legitimate nondiscriminatory reasons.
  • Overly broad authorizations that permit the release of information that the FCRA doesn't allow to be included in a background screening report—for example, bankruptcies that are more than 10 years old.
  • Additional acknowledgements or releases of liability. "That extra stuff not only makes it harder for the prospective employee to understand the main purpose of the document, but it also may violate the FCRA," Lincicum said. "If you have additional waivers, authorizations or disclosures you want to give to prospective employees, do it in a separate document."

Lincicum said that all HR is required to do is provide a potential new hire a "simple, easy-to-understand notification that you will obtain a background screening report, perhaps with a simple explanation of what information will be included in the report. The request for the prospective employee's authorization should be in plain language, too."

Fliegel said that "the FCRA's hyper-technical disclosure and authorization requirements remain a significant source of litigation risk for employers" and that organizations are right to be mindful of compliance.

"Across all industries, in-house attorneys and human resources professionals should assess the need for an updated and privileged review of a company's background check program by a subject matter expert, including a review of all forms and information that are presented to applicants in an online format," he said.

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