Listen to me on WCPN tomorrow morning (8/26) from 9–10, discussing “Ban the Box”

If you’re near a radio tomorrow morning from 9 – 10, tune to 90.3 FM, WCPN, to hear me on The Sound of Ideas.

The topic of the day is “Ban the Box,” the disturbing legislative trend that prohibits employers from asking job applicants about criminal conviction histories on job applications. Given that we have an hour to fill, I imagine the discussion will also more broadly cover employment background searches in general.

If you miss the show live, I’ll have links for everyone to stream it at your leisure. You can also watch live on your computer here.

This is my second appearance on The Sound of Ideas, and I’m grateful to the show for having me back.

Would you rather hire a liar or a criminal?

According to a recent survey conducted by background-screening company EmployeeScreenIQ, resume lies are more of a deal breaker for employers than past crimes.

Of the 600 HR professionals surveyed 45 percent said that they routinely ding candidates with a criminal history on their resume, while a whopping 90 percent refuse to hire some for whom a resume lie is discovered.

Two years ago, when the EEOC announced its Enforcement Guidance on the Consideration of Arrest and Conviction Records, I expressed reservations over regulatory guidance that limited the ability of employers to use criminal histories as a disqualifying factor for certain classes of jobs. I still believe that individuals with certain criminal histories should not hold certain jobs. For example, I remain steadfast that I cannot foresee a situation where a company would ever hire a convicted murdered or sex offender a delivery person.

I would never hire anyone who lies during the hiring process. The most important trait in hiring anyone for a job is honesty. If the bond of honest breaks down between employer and employee, the breakdown of the employment relationship will quickly follow. While not all criminal convictions depict an individual as dishonest, all resume lies do. The fact that this survey shows that double the number of employers refuse to hire candidates with resumes lies versus those who truthfully reveal past crimes does not surprise me in the least.

Readers, what say you? Would you rather hire a liar or a criminal? What is more troubling to you: the applicant who lies on a resume, or an applicant who discloses a criminal history on resume? Sound off in the comments, or on Twitter @jonhyman with the hashtag #liarorcriminal.

Is your company looking at the wrong info to screen candidates using social media

According to recent survey by CareerBuilder.com (hat tip: The Employer Handbook Blog), 39 percent of companies use social media sites to research job candidates, up only two percent from last year. Yet, there was a nine percent jump (from 34 to 43 percent) in the number of hiring managers who report using information found on a social media site to disqualify a candidate from consideration.

Among the types of disqualifying information found on social media sites:

• Provocative/inappropriate photos/info — 50 percent
• Info about drinking or drug use — 48 percent
• Bad mouthing a previous employer — 33 percent
• Poor communication skills — 30 percent
• Discriminatory comments related to race, gender, religion, etc. — 28 percent
• Lying about qualifications — 24 percent

Interesting, North Carolina State University’s Journal of Cyberpsychology, Behavior, and Social Networking just published an article entitled, “Big Five Personality Traits Reflected in Job Applicants’ Social Media Postings.” According to a press release announcing the article’s publication, “Companies may have a fundamental misunderstanding of online behavior and, as a result, may be eliminating desirable job candidates.”

To compile data for the article, researchers tested 175 people to measure the personality traits that companies look for in job candidates (such as conscientiousness, agreeableness and extraversion), and then surveyed their Facebook behavior to link it to the specific personality traits.

The findings were eye-opening:

• There is no significant correlation between conscientiousness and Facebook posts about alcohol or drug use.
• Extroverts are significantly more likely to post about drugs or alcohol of Facebook.

In other words, the 48 percent of the companies in the CareerBuilder survey that reported disqualifying a job candidate because of social media posts about drinking or drug use may have done themselves a disservice. That disservice might be compounded if the position for which the company is hiring favors extroverted personalities (such as a sales position).

All is not bad news from the NC State survey. Study participants who rated high on both agreeableness and conscientiousness were also very unlikely to “badmouth” other people on Facebook, including their former bosses. So, the one-third of companies in the CareerBuilder survey who reported disqualifying a job candidate for bad mouthing a previous employer are likely making a good hiring decision.

Stats are just stats, and should not be taken as the bible on the issue on which they are reporting. Indeed, there are reasons other than agreeableness and conscientiousness for which a company might consider disqualifying a candidate who posts about drug use or drinking. For example, I would question the judgment of anyone posting any info or pictures of drug use, and question the judgment of active job seekers posting photos or other information on excessive drinking.

These two surveys, however, make for an interesting juxtaposition, and show that there might be some science behind how employers are using social media posts to screen applicants and hire employees.

Moreover, regardless of how you use the information you find online, the guidance for the process you should be using the obtain the information remains the same — companies need to ensure that the information upon which they are making hiring decisions is lawful, and that appropriate screens are in place to prevent protected information (such as EEO information) from leaking into the hiring process.

What is main reason to limit access to social media profiles in hiring? EEO information, of course.

In Neiman v. Grange Mutual Casualty Co. (C.D. Ill. 4/26/12), the plaintiff claimed that he was not hired for a position because of his age. The employer argued that it could not have considered the plaintiff’s age because it had no idea how old he was when it made its decision. The plaintiff, however, argued that the employer must have been aware of his age because he included the year he graduated from college on his LinkedIn profile.

According to the court, that allegation was enough to get the plaintiff past the employer’s motion to dismiss:

Plaintiff alleges … that during telephone interviews, Heindel [the Vice President of Human Resources] did inquire about and confirm the year that Plaintiff and the candidate who was selected for the position each earned their degrees. According to the Complaint, the Plaintiff’s interview was conducted in February 2010. It is not difficult to determine that someone who graduated from college in 1989 probably was over the age of 40 in 2010. This is enough to place Integrity on notice that he is subject to the protection of the laws against age discrimination.

Businesses need to understand that without appropriate controls in place, reviewing Google, Facebook, LinkedIn, or any other publicly available online information before making a hiring decision is a risky proposition. These online searches could reveal all sorts of protected EEO information that no employer would want to discover as part of the hiring process.

Assume, for example, that the search revealed that a candidate belonged to a group for breast cancer survivors. You can imagine the potential problems (ADA and GINA, to name two) that could arise if the employer passes over this candidate. You would never ask an interviewee if she is a breast cancer survivor, but the unfettered searches of candidates’ online profiles could put you in the same untenable position as if you had asked.

I see three possible solutions to this potential risk. You should adopt one of these if you are searching applicants online profiles.

1. Don’t do online searches. The easiest way to avoid these potential EEO traps is simply not to conduct online searches. That omission from your screening process, however, will deprive you of valuable information you could learn about a candidate, such as whether s/he presents professionally or matches your corporate culture, how s/he communicates, or if s/he has ever trashed a former company or divulged confidential information. In other words, given the wealth of information you can learn, I think you are doing your organization’s hiring process a disservice by skipping online searches.

2. Outsource the process. Companies are popping up that will conduct these searches for you and return scrubbed reports clean of any potential EEO pitfalls. Of course, because these companies are external to your organization, they add cost to your hiring process.

3. Train someone internally. Alternatively, you can train someone within your organization, but extern to the hiring process, to do the same thing that the third-party vendors are doing—conduct the searches and return a scrubbed report to the hiring manager. Your organization will save the cost of retaining an outside company, but gain the benefit of the person making the hiring decision not coming into contact with protected EEO information.

Criminal background checks remain on the EEOC’s radar

Four months ago, the EEOC issued its Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII. That Guidance prohibits employers from implementing broad-based blanket exclusions on any individuals with an arrest or criminal history. Instead, it provides that the consideration of criminal convictions requires a targeted screen that considers at least the nature of the crime, the time elapsed, and the nature of the job, and then must provide an opportunity for an individualized assessment to determine if the policy as applied is job related and consistent with business necessity.

Last week, the EEOC issued its Draft Strategic Plan for Fiscal Years 2012 – 2016, which provides that the identification, investigation, and litigation of systemic discrimination cases—pattern or practice, policy, and/or class cases where the alleged discrimination has a broad impact on an industry, profession, company, or geographic area—is a top strategic priority for the agency.

On Monday, these two issues came together. The Nashville Business Journal [hat tip: employeescreenIQ Blog] reported that the EEOC will likely filing a lawsuit against Dollar General Corp., challenging that its criminal background check policy has a “disparate impact” on black job candidates and employees. Apparently, Dollar General Corp.’s policy “excludes from employment individuals with certain criminal convictions for specified periods.” This lawsuit comes on the heels of a $3.13 million settlement paid earlier this year by Pepsi to settle litigation with the EEOC over hiring policies that excluded anyone who had been arrested pending prosecution.

Needless to say, the EEOC continues to take a long, hard look at hiring practices—such as the use of arrest and conviction records—because of their potential adverse impact against African Americans and Hispanics. If you are considering using arrest or conviction records to aid in your hiring decisions, do not do so without a reason connecting the offense to the job, and without the input of employment counsel versed on these issues.

[photo credit: brizzle born and bred via photo pin cc]

EEOC announces new guidance on the use of criminal background checks under Title VII that focuses on individualized assessments of past crimes

Yesterday afternoon, the EEOC announced its long awaited, and, by employers, long dreaded, Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions under Title VII (along with a short and sweet Q&A).

The Guidance is not nearly as bad for employers as it could have been. Anyone who feared that the agency would over-reach and proclaim that pre-employment criminal background checks per se violate Title VII will be greatly relieved. As SHRM points out:

SHRM is pleased that the guidance does not appear to impose a one-size-fits-all set of rules on employers and seems to take into consideration that every employer will have different needs and concerns in the use of criminal background checks in hiring.

Nevertheless, the Guidance is not perfect. For example, “as a best practice, and consistent with applicable laws,” the EEOC “recommends that employers not ask about convictions on job applications.” While I certainly appreciate the EEOC’s recommendation, I’m not sure what “applicable laws” it references. This attempt to codify “ban the box” is one clear example where the EEOC is over-reaching.

Perhaps the most controversial piece of the new Guidance is the EEOC’s belief that to survive a potential disparate impact claim, employers must develop a targeted screen that considers at least the nature of the crime, the time elapsed, and the nature of the job, and then must provide an opportunity for an individualized assessment to determine if the policy as applied is job related and consistent with business necessity.

In engaging in this individualized assessment, the EEOC directs employers to consider the following factors:

Individualized assessment generally means that an employer informs the individual that he may be excluded because of past criminal conduct; provides an opportunity to the individual to demonstrate that the exclusion does not properly apply to him; and considers whether the individual’s additional information shows that the policy as applied is not job related and consistent with business necessity.

The individual’s showing may include information that he was not correctly identified in the criminal record, or that the record is otherwise inaccurate.

Other relevant individualized evidence for employers to consider includes:

• The facts or circumstances surrounding the offense or conduct;
• The number of offenses for which the individual was convicted;
• Older age at the time of conviction, or release from prison;
• Evidence that the individual performed the same type of work, post conviction, with the same or a different employer, with no known incidents of criminal conduct;
• The length and consistency of employment history before and after the offense or conduct;
• Rehabilitation efforts (e.g., education/training);
• Employment or character references and any other information regarding fitness for the particular position; and
• Whether the individual is bonded under a federal, state, or local bonding program.

I’m not aware of any requirement under Title VII that requires an individualized assessment in all circumstances. In the EEOC’s opinion, however, forgoing a screen that includes the individualized assessment will make it difficult, if not impossible, for an employer to justify a criminal background check as job related and consistent with business necessity. Yet, applying this individualized assessment for all applicants will impose a heavy burden on employers. And, the greater an employer’s attrition and hiring needs, the heavier that burden will become.

The EEOC concludes by suggesting some best practices for employers who consider criminal record information when making employment decisions:

• Develop a narrowly tailored written policy and procedure for screening applicants and employees for criminal conduct.
• The policy should Identify essential job requirements and the actual circumstances under which the jobs are performed.
• The policy should also determine the specific offenses that may demonstrate unfitness for performing such jobs, and the duration of exclusions for criminal conduct.
• Record the justification for the policy, procedures, and exclusions, including a record of consultations and research considered in crafting the policy and procedures.
• Train managers, hiring officials, and decisionmakers on how to implement the policy and procedures consistent with Title VII.

There is a lot to digest in this comprehensive policy guidance. For example, the EEOC discusses the differences between arrest records and conviction records, and provides specific examples of exclusions that will and will not fall under the umbrella of job related and consistent with business necessity.

This Enforcement Guidance is required reading for any business that takes arrest or conviction records into consideration in any employment decision.

Maryland becomes 1st state to ban requiring employees’ social media passwords

The public outcry against employers requiring the job applicants turn over their Facebook passwords has resulted in legislation. Maryland has become the first state to prohibit employers from requiring or seeking user names, passwords, or any other means to access Internet sites such as Facebook as a condition of employment. Demonstrating the outrage over this issue, the measure passed both house of Maryland’s General Assembly with 96% support.

The law—entitled, “User Name and Password Privacy Protection and Exclusions” (full text here [pdf])—prohibits Maryland employers:

• from requesting or requiring that an employee or applicant disclose any user name, password, or other means to access a personal Internet account;
• from taking, or threatening to take, disciplinary actions for an employee’s refusal to disclose certain password and related information; and
• from failing or refusing to hire an applicant as a result of the applicant’s refusal to disclose certain password and related information.

The law exempts employers that are conducting investigations into compliance with securities or financial laws or regulations, and investigations into the unauthorized downloading of the employer’s proprietary information or financial data to an employee’s personal website.

Eric Meyer, at The Employer Handbook blog, nicely summarizes the main critiques of this bill:

[T]he Maryland Chamber of Commerce opposed the prohibition because the bills did not acknowledge there could be legitimate issues for some employers to want to review applicants' or workers' social media messages.

What concerns me is that there are no carve-outs for public agencies that protect and serve the public. I can understand why a police department may need to fully vet its candidates by making sure that applicants and officers don’t have hate speech towards a particular protected class, for example, on their Facebook page. As I imagine that this information could be used to overturn arrests and indictments.

While I agree with Eric’s take, my critique is more about the small percentage of employers who engage in this practice:

Legal issues aside, this story raises another, more fundamental, question—what type of employer do you want to be? Do you want to be viewed as Big Brother? Do you want a paranoid workforce? Do you want your employees to feel invaded and victimized as soon as they walk in the door, with no sense of personal space or privacy? Or, do you value transparency? Do you want HR practices that engender honesty, and openness, and that recognize that employees are entitled to a life outside of work? … Requiring passwords is not smart.

This law affects you only if: 1) you engage in business in Maryland; and 2) you are among what I believe is the small minority of business that are requiring applicants and employees to turn over social media logins and passwords. Nevertheless, I would expect other states to follow suit, and use the Maryland legislation as a model.

Even if few public sector employers, and fewer private sector employers, are engaging in this practice, this issue bears monitoring.

[Hat tip: The Hill]

Can we all agree that requiring Facebook passwords is a bad idea, and move on?

A lot of ink has been recently spilled in both the popular media and the blawgosphere over the apparent trend of employers requiring job applicants to turn over their Facebook passwords as part of the hiring process. The coverage has been so thick and the outrage so great that United States Senators are calling for action to outlaw this supposed practice, and Facebook officially weighed in, via a post on its blog by its Chief Privacy Officer:

If you are a Facebook user, you should never have to share your password, let anyone access your account, or do anything that might jeopardize the security of your account or violate the privacy of your friends…. That’s why we’ve made it a violation of Facebook’s Statement of Rights and Responsibilities to share or solicit a Facebook password. We don’t think employers should be asking prospective employees to provide their passwords….

If you believe all of this coverage, you would think that this practice is rampant. In reality, I would be surprise if one-percent of one-percent of all employers have even considered asking a job applicant for access to his or her Facebook account, let alone carried through on the thought by making it a hiring requirement. Simply, this is not a problem that needs fixing.

Moreover, this supposed problem isn’t even new. I covered it almost three years ago, when the city of Bozeman, Montana, made headlines by implementing, and quickly rescinding, just such a requirement. It was bad HR policy then, and it’s bad HR policy now. And, the risks of such a policy are well-documented:

1. EEO Risks: Mining Facebook and other social sites for information on job applicants can reveal a wealth of protected EEO information (age, religion, protected medical information, genetic information). The risk is great enough when the information is publicly available; it is exponentially heightened when you gain unfettered access to information shielded by a password. For some thoughts on best practices on conducting Internet searches on applicants or employees, click here. I’ve also expansively covered this topic in my book, Think Before You Click….

2. Stored Communications Act Risks: At least one court has concluded that an employer who requires employees to disclose passwords to social media sites violates the federal Stored Communications Act, which extends liability to parties that exceed authorization to access electronic communications. While this area of the law might be unsettled, testing it could prove a costly mistake.

Legal issues aside, this story raises another, more fundamental, question—what type of employer do you want to be? Do you want to be viewed as Big Brother? Do you want a paranoid workforce? Do you want your employees to feel invaded and victimized as soon as they walk in the door, with no sense of personal space or privacy? Or, do you value transparency? Do you want HR practices that engender honesty, and openness, and that recognize that employees are entitled to a life outside of work?

Social media provides a lot of benefits to employers. It opens channels of communication between employees in and out of the workplace. And, when used smartly, it enables employers to learn more about potential employees than ever before. You can learn if an employee has good communication skills, is a good cultural fit, or trashed a former employer. But, this tool has to be used smartly to avoid legal risks. Requiring passwords is not smart.

Social media is still new, and the rules and regulations that govern it are still evolving. The government is looking for opportunities to regulate social media. If a small minority of business continues pursuing this poor HR practice, Congress will continue pursuing legislative and solutions and calling for regulatory action. Do not provide the government the opportunity. Can we all just agree that requiring Facebook passwords is a bad idea, and move on?

Social media background checks : off-duty conduct laws :: oil : water

One report suggests that as many as 91% of employers use social networking sites to screen potential employees, with as many as 69% of employers rejecting a candidate because of information discovered on a social site. I’ve written before about some of the risks employers face when conducting background checks on employees via Facebook or other social media sites. Here’s one more risk for you to consider: off-duty conduct laws.

29 states have laws that prohibit employers from taking an adverse action against an employee based on their lawful off-duty activities:

• 17 states have “smokers’ rights” statutes, which prohibit discrimination against tobacco users. (Connecticut, Indiana, Kentucky, Louisiana, Maine, Mississippi, New Hampshire, New Jersey, New Mexico, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Virginia, West Virginia, and Wyoming)
• 8 states have statutes that protect the use of any lawful product (e.g., tobacco or alcohol) outside of the workplace. (Illinois, Minnesota, Missouri, Montana, Nevada, North Carolina, Tennessee, and Wisconsin)
• 4 states have statues that protect employees who engage in any lawful activity outside of work. (California, Colorado, New York, and North Dakota)

What do these laws mean for employers’ online background searches? Businesses need to understand that reviewing Google or Facebook before making a hiring or firing decision is a risky proposition, which could reveal myriad lawful off-duty activities that could implicate one of these statutes (in addition to all sorts of protected EEO data).

My suggestion for a best practice? Either to hire a third party to do your searches for you, or to train an employee, insulated from the hiring process, to do them. In either case, the screener should scrub all protected information before providing any report to the the person responsible for making the hiring (or firing) decision.

Notice that Ohio is missing from the list of states with off-duty conduct laws. However, if you have operations in one of the 29 states that have do have these laws, you will want to pay close attention to this issue.

Using arrest and conviction records for hiring. What Does the EEOC Say?

The Peace Corps asked the EEOC for an opinion on the legality of its use of conviction and arrest records to screen potential volunteers. In response, the EEOC published an informal opinion letter, which offers guidance for employers who are considering using conviction or arrest as part of their screening processes.

Conviction Records

• According to the EEOC, conviction records have the potential to have a disparate impact on African Americans and Hispanics. Therefore, employers should only use them when “job related and consistent with business necessity.”
• To ensure that applicants’ criminal history information is used in a way that is consistent with Title VII, the EEOC recommends that employers limit criminal history inquiries to convictions that are related to the specific positions in question, and that have taken place in the past seven years.

Arrest Records

• Arrest records are different than conviction records because of their inherent unreliability. For example, they are not persuasive evidence that the person engaged in the alleged conduct, and may also be poorly reported or updated.
• If employers decided that arrest records serve a useful purpose in screening applicants, their use should be limited to offenses related to the specific position.
• To account for the potential unreliability of arrest records, employers should also provide applicants a reasonable opportunity to dispute their validity.

Calling for a balanced approach to criminal background checks

Yesterday, the EEOC continued its series of public meetings examining hiring practices as alleged employment barriers, covering employers’ use of arrest and conviction records. According to the EEOC’s press release, it is trying to strike a balance between workplace fairness and workplace safety. Let’s hope that the EEOC is serious about being balanced in its approach to this important issue.

The EEOC’s position has always been that blanket policies that disqualify people with criminal backgrounds violates Title VII. Instead employers should undertake a job-by-job, employee-by-employee, check-by-check analysis of the relationship between the conviction and the ability to perform the job. At the minimum, the EEOC should continue this approach.

Nothing will be served by tightening the reigns on employers’ ability to conduct reasonable criminal background searches. Consider, for example, the May 2009 verdict against a Virginia assisted living facility that failed to discover that it had hired a sex offender. This example might be extreme, but it illustrates that criminal histories are necessary and relevant for many employers. Every employer does not need to check the criminal background of every applicant. However, it is imperative that the EEOC allow employers the flexibility to decide for themselves which positions warrant criminal history histories, and then which crimes disqualify a candidate from employment.

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Written by Jon Hyman, a partner in the Labor & Employment group of Kohrman Jackson & Krantz. For more information, contact Jon at (216) 736-7226 or jth@kjk.com.

Start-up offers social media background searches; employers rejoice and privacy advocates mistakenly groan

More employers are turning to social media sites to vet potential employees. There is no doubt that sites like Facebook and Twitter offer a wealth of information about potential hires. Using these sites to vet job candidates offers a great opportunity, and also a huge risk. Using publicly available information on the Internet has the risk of disclosing protected EEO information, such as disability, age, race, or religion, or, at a minimum, raising a dangerous inference that such information was discovered and used in the hiring process.

Nearly two years ago, I cautioned employers against relying solely on online background checks to vet potential employees. I recommended using a “third-party to do the searching, with instructions that any sensitive, protected, or EEO information not be disclosed back to you.” No companies were available, though, that specialized in these types of background searches, until now.

Last month, the FTC signed-off on a year-old company that searches social media sites for employers conducting background searches on employees—Social Intelligence Corp. In last Wednesday’s New York Times, Jennifer Preston wrote a profile of the start-up that has generated a lot of online discussion:

Companies have long used criminal background checks, credit reports and even searches on Google and LinkedIn to probe the previous lives of prospective employees. Now, some companies are requiring job candidates to also pass a social media background check.

A year-old start-up, Social Intelligence, scrapes the Internet for everything prospective employees may have said or done online in the past seven years.

Then it assembles a dossier with examples of professional honors and charitable work, along with negative information that meets specific criteria: online evidence of racist remarks; references to drugs; sexually explicit photos, text messages or videos; flagrant displays of weapons or bombs and clearly identifiable violent activity.

According to Social Intelligence’s CEO, Max Drucker, its services “have turned up examples of people making anti-Semitic comments and racist remarks…. Then there was the job applicant who belonged to a Facebook group, ‘This Is America. I Shouldn’t Have to Press 1 for English.’”

I have not used Social Intelligence’s services, and I am not endorsing its product. What is appealing about it, though, is its professed ability to screen out protected EEO information:

Our technology allows us to turn around reports in 24 to 48 hours while still having social media activity about every job applicant manually reviewed. Social Intelligence Hiring presents employers with reports on only employer-defined objectionable material, such as racist remarks or behavior, explicit photos and video, and illegal activity. We flag job candidates associated with negative and positive material, filtering out their “protected class” information and reporting only relevant and desired data. Summary and detail views present easy-to-understand results, with screenshots of pertinent material.

Social Intelligence has sparked a lively debate on the Internet. The New York Times story alone has a whopping 258 comments to date. I participated in a discussion on Google+ about the New York Times article, where my opinion voicing the validity of checking employees’ social media activities was decidedly in the minority. The majority, who expressed privacy concerns, misses the mark. Social media is inherently public, and employees who do not tend to their online image risk an arduous job search.

If you want to learn more about the proper and improper uses of social media in the hiring process, Think Before You Click: Strategies for Managing Social Media in the Workplace is now available from Thompson Publishing. I also recommend part two of Stephanie Thomas’s Proactive Employer Podcast—the HR and Social Media Roundtable—airing live this Friday (July 29) at 8:30 am on BlogTalkRadio, and later available for on-demand listening at The Proactive Employer and via iTunes.

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Written by Jon Hyman, a partner in the Labor & Employment group of Kohrman Jackson & Krantz. For more information, contact Jon at (216) 736-7226 or jth@kjk.com.

2011: A Rehiring Odyssey

According to CNN, 2011 is going to be the year that American businesses start hiring again:

After three years of economic pain, a growing number of economists think 2011 will finally bring what everyone's been hoping for: More jobs and a self-sustaining recovery.... [E]conomists forecast between 2.5 million and 3 million jobs being added to U.S. payrolls in 2011, about triple the gains likely to be recorded in 2010 and what would be the best one-year jump since the white hot labor market of 1999.

If your business is planning to contribute to these 3 million new jobs, here are some issues for you to think about as you locate and hire the best available candidates to rebuild your workforce:

• Are you going to hire anew from the outside, or rehire former employees?

• Where are you recruiting from and what is your applicant pool?

• When is the last time you read, and revised, your employment application?

• Should you conduct reference or background checks, and how will you do so non-discriminatorily?

• If you are going to check backgrounds, will you use online tools like Facebook and Google?

• Are you asking lawful and non-discriminatory interview questions?

• Will you conduct any applicant testing, such as personality tests, and if so, are they legally timed?

• Do you require medical exams or drug/alcohol tests, and if so, are they legally timed and administered?

• What are the terms and conditions of employment? Offer letters? Non-competition agreements? Confidentiality agreements?

• When is the last time you reviewed and retooled your employee handbook?

There is no magic wand that you can wave to hire the most qualified and productive workforce. How you answer these questions, however, will help ensure that the process you use in restocking your workforce exposes you to the least amount of legal risk.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

A few thoughts on background checks

The New York Times’s You’re the Boss blog ran a piece yesterday discussing background checks of prospective employees. It focuses on a case study of one company that recently decided to run a background check on every new employee after accepting a conditional job offer. I thought I’d share a few thoughts I took away from the article.

1. It is not practical or cost-effective to run a background check on every applicant you are considering hiring. Because of information that could be revealed and the risk of a taint of discrimination, it is also not advisable to use a background check as part of the selection process. The best practice is to use background checks like medical exams and drug screens—as a final vetting after a conditional job offer is made. In a perfect world, no employee should be allowed to start working until after the background screen clears, although the needs of a particular business to have an employee start immediately may win out.

2. The need to screen employees will vary from company to company based on the nature of the business. Not every company will have to screen every employee. If you are not going to screen every employee, though, you should at least screen all employees in the same job. Consistency will eliminate any perception that you are selectively screening candidates based on a protected class.

3. Businesses should be very careful with the use of publically available information on the Internet (e.g., Google and Facebook) to conduct informal background searches. For one thing, the information is difficult to verify and may not be truthful. Also, an Internet search could reveal protected information—such as an employee’s membership in a cancer survivors’ group—that you, as an employer, do not and should not want to know. Internet searches of job candidates, however, do have value, but should only be used as one part of a background screening protocol, and with measures in place to limit the discovery of protected information.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

EEOC holds public hearing on credit histories and employee selection criteria

Yesterday, the EEOC held a public hearing on the use of credit histories as selection criteria in employment. It heard testimony from representatives of the National Consumer Law Center, Lawyers’ Committee for Civil Rights Under Law, the National Council of Negro Women, the U.S. Chamber of Commerce, and the Society of Human Resources Management, in addition to lawyers and psychologists. Following the hearing, the EEOC posted a press release summarizing the testimony. It has also posted the prepared remarks of the people testifying. 
Kudos to the EEOC for presenting a balanced panel of representatives of both employee interests and business interests, even though it is trying to further an agenda against the use of credit histories in employment. Sara Murray, reporting at the Wall Street Journal, synthesizes the core debate between employee advocates the business advocates on this issue:

The underlying concern is that poor credit could become a barrier to landing a job. Employers contend credit checks help them evaluate candidates and protect against fraud. Another concern is the potential discriminatory impact on hiring…. Opponents of the practice cite studies showing that African-Americans and Latinos tend to have lower credit scores. They also dispute whether credit reports are an accurate way to measure an employee’s qualifications.
Proponents of credit checks, which include fraud examiners and credit-reporting groups as well as employers, contend the histories are an important screening tool for employers and tend to be used sparingly…. Michael Eastman, an executive director at the U.S. Chamber of Commerce, told the EEOC that employers take individuals’ circumstances into account. Many at the hearing stressed that employers look for a pattern of careless financial behavior, not one-time events. “It’s very easy for the best, well-intentioned people to have very difficult times,” he said. “Employers recognize that.” Credit checks can also be used as a tool to protect businesses against fraud, supporters argue.

Blanket prohibitions on any practice are usually not a good idea. In this area, there are good reasons to allow the use of credit checks for job candidates. Consider the following, cited during yesterday’s EEOC testimony by Christine Walters of the Society for Human Resource Management and Pamela Devata of Seyfarth Shaw:

• While 60% of employers use credit checks to vet job candidates, only 7.8% use them for all candidates.
  
• Employers generally conduct credit checks when the information is relevant to the particular position: jobs with financial or fiduciary responsibilities (91% of employers), senior executives (46%), and jobs with access to confidential employee information (34%).
  
• Employers do not use credit checks to screen out applicants before they can even get in the door. 57% of businesses only initiate credit checks after a contingent offer, and another 30% only after the job interview.
  
• Credit checks can help protect against employee theft and fraud. In 44.7% of cases of employee fraud, the perpetrators were experiencing financial difficulties, and in 44.6% of cases they were living beyond their means.
  
• According to credit report provider Experian, employers never see credit scores. However, most of the research on the disparities in credit histories between racial groups is based on those scores. It is unfair to hold employers accountable for the scores they never see.
  

Additionally, it is not as if employees are without protections when employers seek to use credit histories in employment decisions. There is an entire federal statute— the Fair Credit Reporting Act—that provides myriad hoops for employers to jump through before and after using credit information. It also requires that employees give their consent before an employer can even request a credit history. And, Title VII prohibits the discriminatory use of credit histories. To per se prohibit employers from using information that is relevant to many positions simply does not make sense from a business perspective, and HR perspective, or an EEO perspective.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

70% of hiring managers report rejecting candidates following internet searches

According to a recent survey conducted by Microsoft, 70% of U.S. hiring managers reject candidates based on information located online, while only 7% of consumers think that online information affected their job search.

The following are the most two most interesting findings from the study:

Do you review online reputational information about candidates when evaluating them for a potential job / college admission?

• All the time – 44%
• Most of the time – 35%
• Sometimes – 9%
• Rarely – 5%
• Never – 6%

What are the types of online reputational information that influenced decisions to reject a candidate?

• Concerns about the candidate’s lifestyle – 58%
• Inappropriate comments and text written by the candidate – 56%
• Unsuitable photos , videos, and information – 55%
• Inappropriate comments or text written by friends and relatives – 43%
• Comments criticizing previous employers, co-workers, or clients – 40%
• Inappropriate comments or text written by colleagues – 40%
• Membership in certain groups and networks – 35%
• Discovered that information the candidate shared was false – 30%
• Poor communication skills displayed online – 27%
• Concern about the candidate’s financial background – 16%

And yet, nearly 90% of recruiters and HR professionals surveyed report that they are somewhat to very concerned that the online reputational information they discover may be inaccurate. If you want to review the complete findings, Microsoft has made available a summary as a PDF, and its full research results as a PowerPoint.

What does all of this mean? Here’s what I’ve said previously on this issue:

There is a justified fear that a lot of the information on the internet is unreliable and unverifiable. I have another problem with HR departments willy-nilly performing internet searches on job applicants – the risk that such a search will disclose protected information such as age, sex, race, or medical information.

For more on developing a DIY internet background screening strategy for your company, see Googling job applicants. You can also check out what the Delaware Employment Law Blog has to say on this issue.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Bills seeks to prohibit use of credit information in employment

Ohio House Bill 340 seeks to make it unlawful for an employer to discriminate on the basis of credit history. If enacted, it would amend Ohio’s anti-discrimination law to include the following:

It shall be an unlawful discriminatory practice for an employer to use a person's credit rating or score or consumer credit history as a factor in making decisions regarding that person's employment, including hiring, tenure, terms, conditions, or privileges of employment, or any matter directly or indirectly related to employment.

Unlike the federal bankruptcy discrimination statute we looked at on Tuesday, this law would prohibit any use of credit information in employment. While there is no doubt that many have been adversely affected by the ongoing economic crisis, this statute is an overreaction. There exist lots of valid reasons to use consumer credit as one factor in the hiring matrix. For example, if you can conclude that an applicant does not, for whatever reason, manage his personal finances properly, do you want to hire him to handle your business’s finances as its controller or have access to money in your cash register?

The federal Fair Credit Reporting Act already provides protections to consumers in how employers obtain their credit information, and prohibit access without consent. We do not need additional protection to limit how employers use this lawfully obtained information, especially when this information can give employers insight to an employee’s sense of personal responsibility.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Do you know? Bankruptcy discrimination

The economy will continue to dominate the headlines in 2010. And, as the economy continues to struggle to rebound, it is likely that your business will have employees who have filed bankruptcy. The question is what do you do with this information.

Do you know that bankruptcy discrimination is unlawful under the Bankruptcy Code.

No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt – (1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act; (2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or (3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.

In other words, federal law prohibits an employer from terminating an employee or taking an other adverse action against an employee because that employee filed bankruptcy or is associated with someone else who filed bankruptcy.

Three key points to make about this statute:

1. With one exception, every court that has applied this statute has found that it only applies to termination decisions – not hiring decisions. Thus, employers are reasonably safe taking a bankruptcy into consideration when making a hiring decision.

2. The Fair Credit Reporting Act still applies to how employers obtain employee credit information from third parties, including information about bankruptcies. This law only impacts what employers do with the information once they get it.

3. Unlike Title VII, this statute is narrowly written to provide that the bankruptcy must be the sole reason for the adverse action before liability attaches. This is a high standard for a plaintiff to meet, and perhaps explains why we see so few of these cases.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.

Googling job applicants

According a prediction by Dan Schawbel at the Personal Branding Blog (courtesy of FYIscreening.com), by 2012 100% of companies will be conducting informal on-line background checks of job candidates. This prediction dovetails the following comment from one of the presenters during the ABA’s Labor & Employment Conference, discussing this very issue, “Would you date someone without Googling them first?” His point is a valid one. A hiring decision deserves at least the same minimum level of scrutiny and diligence as a first date.

Informal background checks are subject to a lot of debate in the background screening industry. There is a justified fear that a lot of the information on the internet is unreliable and unverifiable. I have another problem with HR departments willy-nilly performing internet searches on job applicants – the risk that such a search will disclose protected information such as age, sex, race, or medical information.

Consider the following example. Jane Doe submits a job application to ABC Corp. ABC’s HR department, before even deciding whether to interview Ms. Doe, types her name into Google. What happens if a breast cancer survivor group pops up? If ABC declines to interview Ms. Doe, do you think it would be opening itself up to a claim that it failed to hire her because it regarded her as disabled?

Despite these risks, internet searches have some real value for employers. They just have be done carefully and with certain built-in protections:

1. Consult with your employment attorney to develop policies, procedures, and guidelines for the gathering and use of internet-based information without running afoul of EEO and other laws.
2. Print a clear disclaimer on the job application that you may conduct an internet search, including sites such as Facebook, MySpace, and LinkedIn, and general searches using search engines such as Google and Bing.
3. Only conduct the search after a candidate has been made a conditional job offer.
4. Consider using a third-party to do the searching, with instructions that any sensitive, protected, or EEO information not be disclosed back to you.
5. Do not limit yourself to internet searches as the only form of background screening.

The internet holds a wealth of information about potential employees. Be careful in how your hirers and recruiters handle this tool to avoid stepping in a big EEO trap.

Do you know? Fake job references?

More people are out of work at any time in the past 25 years. And, it appears that some are taking desperate measures to find new jobs. ABCNews.com reports that companies have sprung up that will sell a job hunter a fake reference: CareerExcuse.com and Alibi HQ.

It’s not newsworthy that people lie to get jobs. What is newsworthy, though, is the ease at which the desperate unemployed can find a bogus, yet legitimate sounding, employment reference. The internet has made it almost too easy for a job candidate to create an entirely fictitious, yet 100% verifiable, work history.

Employers screening job candidates need to be extra vigilant. Just as the internet has enabled companies like CareerExcuse to flourish, it also provides the tools for you to call a bluff. Don’t just take an applicant’s word that he worked for ABC Widgets for 10 years. Google the company and see if it exists. Look for an independent phone number to verify employment. A little diligence up front can go a long way to saving headaches down the road.

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Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus.

For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.