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2 Format of This Presentation This PowerPoint has 20 slides, & my presentation handout has 13 pages. Because some of this information is so dense, Ill take questions & entertain discussion at ANY TIME, EVEN NOW. So, Ill use this PowerPoint as a launch point for discussion, but not to lecture. © 2009 All Rights Reserved, Charles A. Krugel; # 2

3 Why Background Screening? To systematize the hiring process It could be legally required To avoid negligent hiring As part of due diligence to ensure public safety, avoid scrutiny, or if buying, selling or merging the business Your business was burned once before © 2009 All Rights Reserved, Charles A. Krugel; # 3

4 Laws to Consider in Background Checking My 14-page Handout Goes Into Greater Depth Federal Trade Commission Act Fair Credit Reporting Act (FCRA) Fair & Accurate Credit Transactions Act of 2003 (FACTA) Federal, state & local civil rights acts which establish protected classes such as race, gender, disability, pregnancy, etc. Employee Polygraph Protection Act Health Insurance Portability and Accountability Act of 1996 (HIPPA) Stored Communications Act Electronic Communications Privacy Act of 1986 Federal, State & Local Labor Relations Laws (prediction: these will become much more important if the EFCA/Card Check Bill is passed) © 2009 All Rights Reserved, Charles A. Krugel; # 4

5 3 rd Party Background Checking Companies Versus Doing-It-Yourself Federal background checking laws GENERALLY apply when a company uses a 3 rd party provider; not when it conducts the check itself using the web or other means which dont involve the use of an aggregator. However, a company that does DIY checks might be held liable for negligence, or to a greater level of liability for disparate impact or treatment, whereas it may not be liable for acts of the 3 rd party provider, so long as the provider is qualified & competent. © 2009 All Rights Reserved, Charles A. Krugel; # 5

6 Online Reviews & References in Background Screening The onset of social & business networking websites has made internal/DIY screening cheaper & easier. However, consider this: If an employer writes a positive review or reference for an employee or ex-employee, whos later fired or loses it, the reference or review could be used as evidence for wrongful termination or negligence. © 2009 All Rights Reserved, Charles A. Krugel; # 6

7 Online Recommendations & References The National Law Journal, 7/6/09, by Tresa Baldas; Lawyers warn employers against giving glowing reviews on LinkedIn. Employers risk having the recommendations used against them in a discrimination or harassment suit. Online postings pose serious litigation issues due to discovery & evidence. Context of the posting is important. © 2009 All Rights Reserved, Charles A. Krugel; # 7

8 Some Statistics Regarding Online Networking Sites According to a survey of 100 hiring managers, from companies of all sizes, 66% visit LinkedIn, 23% visit Facebook & 16% use Twitter. From Jump Start Social Media, Digital Brand Expressions & InternetBizNet survey; results released 7/9/09. ExecuNet,, in 2007, 83% of 131 executive & corporate recruiters surveyed said that they use search engines to learn about candidates. 43% eliminated a candidate based on online information. This is up from 77% & 35% respectively in © 2009, All Rights Reserved, Charles A. Krugel; # 8

9 More Statistics Reported 8/19/09: Of 2,667 hiring managers participating in a Career-Builder survey completed in 6/09 (with 95% probability of results have a +/- 1.9% sampling error (from –45% use social networking sites to research candidates (22% in 08) –Of that 45%, 29% use Facebook, 26% use LinkedIn & 21% use MySpace. 11% search blogs & 7% Twitter to follow candidates 35% of employers didnt hire based on what they learned of the candidates. –29% of candidates showed poor communication skills –26% of candidates made discriminatory comments –24% of candidates lied about qualifications –20% shared confidential information from previous employer 14%-16% eliminated candidates due to using emoticons or texting language (e.g., gr8) in job application documents. 18% of employers said the online content caused them to hire a candidate. 50% said online profile indicated company fit. © 2009 All Rights Reserved, Charles A. Krugel; # 9

10 Possible Legal Causes of Action in Workplace Online Communications 4 th Amendment personal privacy rights 1 st Amendment freedom of speech Discrimination/harassment Copyrights, patents, trademarks, secrets, confidentiality Defamation, libel, slander Contract (employment, union, etc.) © 2009 All Rights Reserved, Charles A. Krugel; # 10

11 True Stories About Online Communications Krugels Client Story from 2006: From client: I have an issue to discuss with you pertaining to a candidate we interviewed... referred... by a headhunter. We interviewed the candidate. He did not interview well & he did not pass a test he was given during the interview. The candidate is now saying he believes our decision not to hire him is related to his age & that he intends to file a formal complaint... alleging discrimination.... Ive attached all the email correspondence weve had pertaining to this candidate & Id like your thoughts on the issue & your suggestion as to how we should proceed. The email in which he states his intent to file a complaint is the last attachment. The email titled Feedback contains the notes of a discussion our headhunter had with [him] earlier today. From headhunter in the same email chain: Here is another person with very good experiences & strong C++. His is looking for $100K/year. He has some slight accent, but sounds pretty confident. © 2009 All Rights Reserved, Charles A. Krugel; # 11

12 True Facebook Story 8/9/09 – The Danger of Friending Your Boss from boss-fb-bitch-job/ © 2009 All Rights Reserved, Charles A. Krugel; # 12

13 Quote from Patricia Vaccarino, PR Exec. in Seattle (from 8/6/09) Many of her Facebook friends have posted in great detail about their colonoscopies, dead teeth pulled, dead dogs, flatulence, adult acne, marital breakups, battles with mental illness & drinking problems. Why wouldnt an employer or recruiter consult such free resources that might provide such valuable information? © 2009 All Rights Reserved, Charles A. Krugel; # 13

14 Some Policy & Practice Recommendations Consider using a carefully worded communications policy that permits the monitoring of all communications on company premises that occur during work hours & that use company equipment. –Intercepted vs. stored communications (case law distinction). –Maybe a release/waiver for any liability for same? Consider an integrated & open/transparent online communications policy; all relevant personnel should have access to all candidate info.; restrict use of such info. Figure out a way to avoid the left hand not knowing what the right hand is doing problem. © 2009 All Rights Reserved, Charles A. Krugel; # 14

15 Sample Policies Continued COMMUNICATING WITH CIVILITY Civil behavior towards each other, customers & guests is a hallmark of a profitable customer-centered business. Civil behavior includes verbal, written & nonverbal forms of communication & gestures, body language, spoken word & written expressions. Any instances of uncivil behavior towards guests, staff or the public, which negatively reflects back to our business, may be subject to disciplinary action up to or including discharge. Moreover, profanity, rude or lewd references to customers, coworkers or any member of the public, while at work, is prohibited. Initials _____ © 2009 All Rights Reserved, Charles A. Krugel; # 15

16 Sample Policies Continued COMMUNICATION WITH THE MEDIA, PROSPECTIVE & FORMER EMPLOYEES & OTHER ORGANIZATIONS No employee is permitted to speak, on or off the record, with the media, prospective or former employees, & community or business associations, unless given prior & express permission from management. The purpose of this policy isnt to intimidate or censor employees. The purpose is to ensure that our branding & image remains consistent in the publics eye, & that were not giving competitive information or secrets away. So, if anyone is approached by any member of the media, the communications departments or personnel of any associations (neighborhood, community, professional, etc.), & is asked to comment on your employer, please do not speak with them (even off the record), until management has expressly approved such communication. If approached, feel free to inform any solicitor of this policy & direct them to management. This is a very serious matter for us, so failure to comply with this policy may result in discipline or discharge. Initials _______ © 2009 All Rights Reserved, Charles A. Krugel; # 16

17 Sample Policies Concluded USE OF Company EQUIPMENT (SAMPLE POLICY) Use of our phones, computers, faxes, Internet, etc., for personal use (i.e., anything that doesnt benefit us) is strictly prohibited, unless authorized by your supervisor or another member of management. COMMENT: Consider integrating the online communications policy into your references & recommendations policy or practices. © 2009 All Rights Reserved, Charles A. Krugel; # 17

18 Then Again... The monitoring of all workplace communication, or the exclusion of one type over another, such as prohibiting Twitter but allowing LinkedIn, can be very difficult to administer. Perhaps starting out with a broad civility policy, thats based on common sense, & dealing with issues on an ad hoc or case-by-case basis is an easier & more efficient way to start to address online communications. © 2009 All Rights Reserved, Charles A. Krugel; # 18

19 Question for Thought An employer advertises a position online. It mainly posts the position on websites that are overwhelmingly visited by white people. Is this disparate impact or disparate treatment? Answer: Probably not disparate treatment, but could be disparate impact. © 2009 All Rights Reserved, Charles A. Krugel; # 19

20 Last Slide: Questions for Thought Essentially, online social networking is a relatively new phenomenon in the public & legal realms. Although there are laws which address online conduct, were still e-infants & have a lot to figure out. –Therefore, should businesses & recruiters not discuss hiring decisions online with candidates or the public in general? Should employers should be more secretive? Due to the immediacy of online communication, public expectations of commerce & protocol are changing. Businesses today are striving for greater transparency & intimacy with the public, in order to take advantage of the market place changes in expectations & protocol. How does an employer or recruiter engage in online activities, & the incumbent transparency & intimacy, while minimizing their legal exposure & liability? © 2009 All Rights Reserved, Charles A. Krugel; # 20


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