Hiring is a process. You must create the ad, review resumes, interview candidates, make an offer and finally screen before making the final hiring decision. Seems fairly simple, however, one misstep in the process and the employer is looking at a lawsuit instead of a new hire.

The latest hiring misstep, and the reason for this post today, comes from the trucking company Swift Transportation. The company recently settled class action suit in court for $4.4 Million after failing to comply with the FCRA.

The Case

The suit was brought against Swift almost a year ago, after a candidate was turned down due to screening results. The claim being: during the screening process the company failed to inform the candidates of their rights to information found and used in the hiring process.

Now this may not seem like that big of a deal but according to the FCRA it is. When taking adverse action the FCRA clearly states how an employer must proceed before making the final hiring decision.

What is Adverse Action?

Adverse action is a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee. The FCRA states the specific steps an employer must take with adverse action, this includes:

Before taking adverse action the person must first provide the consumer to whom the report relates:

  1. A copy of the report; and
  2. A description in writing of the rights of the consumer under the title, as prescribed by the Bureau.

According to the lawsuit, the main Plaintiff James Ellis and as many as 10,000 other applicants were denied these rights. Swift denied the claim but still ended up settling.

Potential Lawsuits:

The hiring process may seem simple but don’t be fooled. The screening process is one of the more regulated parts of the hiring process but any part of the process can land you in hot water.

Here are examples:

  • The AD: IBM found itself in a lawsuit after one of its job ads stated a citizenship preference. See full story here.
  • Review of resumes: With online resumes it is easy to view private information employers are not supposed to have access to. EEOC Guidance on Social Media.
  • Interview: The EEOC has strict guidelines on what an employer may and may not ask in an interview. See Prohibited Practices here.
  • Offer & Screening: The FCRA is very specific on every part of the screening process. See this recent case with Whole Foods.

Before hiring make sure you know your state laws and regulations. For other best practices subscribe to our blog here, and download our free 23 page guide to Applicant Background Screening in 2014.

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