1. Northern New Mexico Human Resources Association November 13, 2012 Background Checks Scott D. Gordon

2. The Case for Background Checks Spencer v. Health Force, Inc., 2005-NMSC-002, ¶¶ 10, 22-24, 137 N.M. 64, 107 P.3d 504.

3. Negligent Hiring If you know or should know that hiring someone will create an unreasonable risk of injury to a group or class of people, if you fail to use ordinary care in hiring and if your negligence results in an injury to someone else, you are liable in damages for that injury. UJI 13-1647 NMRA

4. Negligent Hiring An employer can be held liable for the injuries caused by its employee to a member of the public, even if the employee was acting outside the course and scope of employment. Estate of Gutierrez v. Meteor Monument, 2012-NMSC-004, 274 P.3d 97.

5. Background Information Available Criminal Financial Driver’s license Property ownership Litigation history Sex offender watch lists Other

6. Job Applicant

7. Can you learn too much? Some information is prohibited from use in making some hiring decisions: –Sexual preference –Credit history –Driver’s license –Military service

8. Arrest v. Conviction Records “Have you ever been arrested?” Arrests are not proof of criminal behavior. Rules excluding employees based on arrest records may have an adverse impact on certain minority groups. Adverse impact discrimination is just as illegal as disparate treatment.

9. EEOC Enforcement Guidance “The fact of an arrest does not establish that criminal conduct has occurred, and an exclusion based on an arrest, in itself, is not job related and consistent with business necessity.” “However, an employer may make an employment decision based on the conduct underlying an arrest if the conduct makes the individual unfit for the position in question.”

10. EEOC Enforcement Guidance “[A] conviction record will usually serve as sufficient evidence that a person engaged in particular conduct. In certain circumstances, however, there may be reasons for an employer not to rely on the conviction record alone when making an employment decision.”

11. When should you look past a conviction? When exclusion based on crime is not job-related and based on business necessity. Do an individualized assessment. How old is the conviction? What is the nature of the offense? What is the nature of the job?

12. Hypothetical Seeking event director.

13. NMSA § 30-8-12, Conduct offensive to public well-being. “Conduct offensive to public well-being consists of any person... conducting or participating in any physical or mental endurance contest for a period longer than twenty-four hours or conducting or participating in any such endurance contest within any period of one hundred sixty-eight hours.”

14. Lessons Make background checks job related. Give the applicant a chance to explain. Conduct an individualized assessment.

15. EEOC Enforcement Guidance “As a best practice, … the [EEOC] recommends that employers not ask about convictions on job applications and that, if and when they make such inquiries, the inquiries be limited to convictions for which exclusion would be job related for the position in question and consistent with business necessity.”

16. Sometimes, you can’t hire a criminal. Under Title VII’s national security exception, it is not unlawful for an employer to “fail or refuse to hire and employ” an individual because “such individual has not fulfilled or has ceased to fulfill” the federal security requirements.

17. Do the background check before you hire. New Mexico recognizes promissory estoppel in hiring. It’s better to know before you hire. Timing is important.

18. Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq.

19. Fair Credit Reporting Act Businesses that sell background information to employers are probably considered “consumer reporting agencies.” The FCRA does not apply to employers that do their own background checks.

20. FCRA Rules Give notice of intent to obtain consumer report. Get written consent from applicant. Provide agency with certificate of compliance.

21. FCRA Rules Before taking adverse action: –Provide a copy of the report to the applicant. –Give notice of adverse action (may be verbal, but do it in writing). –Wait a reasonable length of time to give employee chance to challenge (5 days is recommended).

22. FCRA Rules Give notice post-adverse action. Disclose the reason for not hiring. –This gives the applicant another chance to challenge.

23. Timing is important. Under the ADA, an employer may not require applicants to undergo medical examinations or to disclose personal medical information until after a conditional offer of employment is made. 42 U.S.C. § 12112 (d) (3).

24. Timing is important. A conditional offer of employment is not considered real if it is conditioned on a background check. Leonel v. American Airlines, Inc., 400 F.3d 702 (9th Cir. 2005) (under ADA, employer could not require job applicants to disclose personal medical information until after employer assured applicants they had passed all non-medical stages of the hiring process, including the background check.)

25. Best Practices (EEOC) Train managers, hiring officials, and decision-makers about Title VII. Have a written policy for screening applicants and employees for criminal conduct. Identify essential job requirements and determine specific offenses that demonstrate unfitness. Conduct individualized assessments.

26. Best Practices (EEOC) (Cont’d) Document the background research and the justification for not hiring. Limit questions to crimes that matter. Purge application forms of questions about criminal records. Keep information about criminal records confidential and only use it for a proper purpose.

27. Other Good Ideas Do the background check before you hire the applicant. Insulate decision-makers from irrelevant information. If you use credit reporting agencies, develop forms for notice and disclosure. Make the medical exam -- and medical questions -- the last thing you do before hiring.

28. Questions? Scott D. Gordon Rodey Law Firm sgordon@rodey.com 505-768-7264