reply to our column "I Don't Have The Time", awhile back that
asked, “what are you doing with your time” we received the following.
company has downsized to the point we no longer have a human resources
department and the responsibility for recruitment and hiring is now the
responsibility of each division. I have been delegated the responsibility of
checking and verifying the background information of the job applicants.
This is not only very time consuming but also frustrating because I’ve
found that references whether they be former employees, schools or personal
references are reluctant to provide any information beyond we know the
person for fear of being sued. Do you have any suggestions that could help
me so that I could spend more hours on the tasks that I was originally hired
to do? Thank you. Scott S.
MANY department heads today are faced with not only hiring qualified
applicants but also conducting employment background and reference checks.
This is due, to a large part as Scott wrote, with organizations reducing or
eliminating altogether the H.R. function and delegating the H.R. role to
division and department managers.
EMPLOYMENT background checks should be a vital part of the interview
process for employers attempting to hire qualified applicants for any
position regardless of its importance. Prudent employers should not only
contact an applicants previous employer for information regarding job
performance but also contact personal references; check school transcripts
and run credit reports to make certain the applicant is not only who he/she
claims to be but also qualified for the position applied for. Because
failure to conduct thorough background checks can subject employers to
negligent hiring suits, many state governments have mandated through
legislation that state, county and city employees be subjected to a thorough
background investigation prior to being offered employment or continued
employment is subject to a satisfactory background check.
RARE is the case of a prospective employer being sued for
investigating the job history or references while conducting a background
investigation of a job applicant. There
are, however, volumes of cases where former employers, managers and
employees have been sued for libel, defamation and/or slander after
providing information about former employees. Because of this many firms
have adopted strict policies as to the information provided to prospective
employers who inquire about former employees. Usually, the information
provided is no more then: dates of employment, job titles, beginning and
ending salary and whether the individual is eligible for rehire. Firms
fearful of liability by providing information about former employees usually
instruct their employees not to release company files or make any personal
MANY prospective employers, therefore, believe that it is pointless
to conduct a background check on job applicants because the information
provided is not relevant to what they are trying to ascertain. According to
Ruark Mershon, an attorney with Hammerle Finley this is unfortunate because
there are practical methods employers may use to obtain as much background
information as possible without incurring liability on either the past
employer, educational institution, reference or the prospective employer.
“COMPANIES who want to obtain detailed information on job
applicants, says Mershon, should require the applicant to sign an
authorization giving the prospective employer permission to obtain
information from previous employers, educational institutions and other
references”. The authorization should specifically permit the prospective
employer, or any investigator working on its behalf, to obtain information
from the applicant’s former employers and their employees, schools,
residential property managers, acquaintances, customers or vendors relating
to any of the applicant’s activities. It should authorize those persons to
release all such information upon receipt of a copy of the authorization.
The authorization should include release language specifically releasing all
persons or entities for revealing or receiving information in connection
with asking for or responding to questions about the applicants job
performance, work habits, personal background, educational records, criminal
background, etc. The form should contain a place for the applicant to sign
and the document witnessed, preferably by a notary, verifying the
“OBTAINING a properly worded authorization from an applicant can
protect both former and current employers from liability for invasion of
privacy, libel, defamation, slander and other claims by the applicant”,
says Mershon. A properly executed authorization form assists a prospective
employer in obtaining as much information about an applicant as possible,
while insulating the company from liability, at less risk and improving the
quality of the employees hired.
MERSHON says there is case law to support that obtaining a signed
authorization can protect both the inquiring and responding company from a
lawsuit by a disgruntled applicant. In Smith v. Holley, 827 S.W. 2d
433 (San Antonio 1992), the 4th Court of Appeals held that such
an authorization absolved the former employer from liability when the
applicant, Smith, sued her former employer and supervisor because the
references given to her new prospective employer were unfavorable. The Court
ruled that the authorization she signed was an absolute bar to the suit. Smith
is particularly significant because the court held that any comments made
within the scope of the authorization were not liable, even if the negative
comments or information provided was made with malicious intent. The Court
held that any comments and information were privileged under the terms of
the authorization. Even the 9th U.S. Circuit Court of Appeals,
widely considered by legal practitioners as liberal and pro-employee, has
upheld Smith and opinioned that a properly worded release provides an
absolute privilege, defeating any claims from libel, defamation or slander.
See Cox v. Nasche, 70 F.3d 1030 (1995).
CREDIT checks can also be an important
part of investigating job applicants or employees seeking promotions. The
Fair Credit Reporting Act, 15 U.S.C. §1681-1681(t) regulate an employer’s
access to and use of credit reports. Under these regulations an employer
must provide a job applicant or employee with a clear and conspicuous
disclosure, obtain the applicant’s or employee’s written authorization
for obtaining the report, provide the applicant/employee a copy of the
credit report and provide a written description of the rights that the
applicant has pursuant to the FCRA. Having said that, courts have held that
the use of credit reports to evaluate an applicant for employment is not a
discriminatory employment practice, see Pettus v. TRW Consumer Credit
Service, 49 F.3d 728 (5th Circuit 1995) and courts have
further held that it is not discriminatory for an employer to obtain a
credit report for the purpose of evaluating whether to discharge an
employee. It is strongly recommended that employers carefully review the
FCRA before obtaining or using credit reports.
FINDING and hiring qualified employees is not an easy assignment. By
following the suggestions above, employers should be able to investigate and
obtain valuable information about potential employees without fear of
lawsuits from rejected applicants and in the case of Scott S. return to the
tasks they were originally hired to do.
I wish you well.
The information provided above is for
educational purposes only and not provided as legal advice. Legal advice
should be obtained from a licensed attorney in good standing with the Bar
Association and preferably Board Certified in either Creditor Rights or