United States: Two Federal Agencies Co-Publish New Guidance On Employee Background Checks

Many employers already know that rules about employee background checks are jointly enforced by two federal agencies. Thus, while the Equal Employment Opportunity Commission (EEOC) oversees background checks to prohibit unlawful discrimination, the Federal Trade Commission (FTC) monitors background checks to enforce the notice and fair play provisions of the Fair Credit Reporting Act (FCRA). Some employers may be unaware, however, that, on March 10, 2014, the EEOC and FTC co-published two new technical assistance documents relating to their intersecting enforcement roles. The new documents, entitled Background Checks: What Employers Need to Know and Background Checks: What Job Applicants and Employees Need to Know, are available on either agency's website. And while there is little information in either document that is new, the new guidance nevertheless provides a useful refresher that underscores key points concerning this area of employment law. The key points are as follows:

1. Employers still are allowed to ask job applicants and employees for a wide range of individual background information, and it generally is not illegal to require that an applicant or employee submit to a background check.

2. But regardless of how background information is obtained, an employer that uses the information to make an employment decision must comply with three sets of laws. They are federal laws protecting individuals from employment discrimination, the FTC's rules relating to enforcement of the FCRA, and any state or local laws that apply.1

3. Before obtaining job applicant or employee background information from a company that is in the business of compiling such information, an employer must do all of the following to comply with the FCRA:

  • The employer must tell the applicant or employee that it might use the information for decisions about his or her employment. This notice (a) must be in writing, (b) must be in a stand-alone format, and (c) cannot be in an employment application. The employer "can include some minor additional information in the notice (like a brief description of the nature of consumer reports), but only if it doesn't confuse or detract from the notice."
  • If the employer is asking a company to provide an "investigative report" (i.e., a report based on personal interviews concerning a person's character, general reputation, personal characteristics, and lifestyle), then the employer also must tell the applicant or employee of his or her right to a description of the nature and scope of the investigation.
  • The employer must get the applicant's or employee's written permission to do the background check. This can be part of the document used by the employer to notify the person that the employer will get the report. If the employer wants the authorization to allow background reports throughout the person's employment, then the notice must say so "clearly and conspicuously."
  • The employer must certify to the company from which it is getting the report that the employer (a) notified the applicant and got his or her permission to get a background report, (b) complied with all FCRA requirements, (c) will not discriminate against the applicant or employee or otherwise misuse the information in violation of federal or state equal opportunity laws or regulations.

4. When taking an adverse action against a job applicant or employee (for example, not hiring an applicant or firing an employee) based on background information obtained through a company in the business of compiling background information, the employer is required by the FCRA to give the applicant or employee all of the following: (a) a notice that includes a copy of the consumer report relied on to make the adverse decision, (b) a copy of "A Summary of Your Rights Under the Fair Credit Reporting Act" (which the employer should have received from the company that provided the report), and (c) "notice in advance . . . [that the applicant or employee] has an opportunity to review the report and explain any negative information."

5. After taking an adverse action against an job applicant or employee, the employer is required by the FCRA to tell the applicant or employee (orally, in writing, or electronically) all of the following: (a) that he or she was rejected because of information in the report; (b) the name, address, and phone number of the company that sold the report; (c) that the company selling the report did not make the hiring decision and cannot give specific reasons for it; and (d) that he or she has a right to dispute the report's accuracy or completeness, and to get an additional free report from the reporting company within 60 days.

6. There also are limitations on the subject matter of an employer's lawful inquiry. Employers are not allowed to ask for medical information until a job is offered. And only in rare circumstances may employers ask a job applicant or employee for genetic information, including family medical history. Indeed, even in those rare circumstances when an employer can ask for genetic information, the employer should not use it to make an employment decision.

7. All the usual non-discrimination laws apply in this area. Whenever an employer asks a job applicant or employee about his or her background, or uses the information obtained from such an inquiry, the employer must do so without discriminating on the basis of race, national origin, color, sex, religion, disability, genetic information (including family medical history), older age (40 or older), or other protected status.

8. Improperly obtaining or using a background check can constitute unlawful discrimination either as "disparate treatment" or "disparate impact." For example, it would be unlawful "disparate treatment" to reject job applicants of one ethnicity with criminal records, but not reject other applicants with the same criminal records. Likewise, according to the EEOC, it would be unlawful "disparate impact" if the employer's policy or practice (a) excludes people with certain criminal records to the disadvantage of individuals of a particular race, national origin, or other protected characteristic, but (b) does not accurately predict who will be a responsible, reliable, or safe employee. Or to state the latter point more simply, any employer policy or practice with a "disparate impact" has to be "job related and consistent with business necessity."

9. And this final point may be the most important. Any job applicant or employee can ensure that mistakes in his or her own report are corrected before they cause problems. He not only can ask the background reporting company to fix the mistake and send a copy of the corrected report to the employer. He also can tell the employer about any mistake or report directly. It does not cost an individual anything to fix mistakes in advance, before they are seen by an employer. A diligent job applicant or employee can get a free copy of his or her credit report either by visiting www.annualcreditreport.com or calling 1-877-322-8228.


1. For example, Massachusetts has its own non-discrimination laws (see M.G.L. c. 151B) and consumer credit reporting laws (see M.G.L. c. 93, §§ 50-69), has placed special limitations on employer inquiries into criminal offense information (see M.G.L. c. 151B, §§ 9, 9½), and has established a separate agency and regulatory framework to handle requests for criminal offender record information (see M.G.L. c. 6, §§ 167-178Q).

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
McLane Middleton, Professional Association
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
McLane Middleton, Professional Association
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions