Navigating Hiring Regulations in Today’s Legal Environment

By DriverFacts​​​​

In the advent of the Pre-employment Screening Program (PSP), motor carriers are becoming more aware of the parameters established by the FCRA (Fair Credit Reporting Act) and the importance of remaining compliant during the hiring process.

“What these regulations have done is add a level of complexity to what I call ‘the back end’,” says Steve Sichterman, Vice President of Business Development for DriverFacts, a service designed to improve hiring practices for truckload carriers. “Carriers are now crossing their t’s and dotting their i’s, making sure they’ve done everything correctly. This complexity is so much greater today, and that makes it tough.”

Fortunately, there are simple steps to help your company navigate these complicated regulations and avoid costly litigation.


Starting with…

The four steps to FCRA compliance

Disclosure & authorization
Under Fair Credit Reporting Act guidelines, an employer must disclose clear intent—in writing—to order a background check.

According to Sichterman, simply including a small disclaimer at the bottom of an application—especially one using complicated, extraneous language—is not enough: “The intent must be stand-alone, meaning it should be presented to the applicant as its own separate document, using language that is easy to understand. Anything other than that, and you could put your company at risk.”

After issuing the intent, the employer must receive written authorization from the applicant before moving forward with the inquiry. While the intent must stand alone from the application and other documents, it is acceptable for the authorization provided by the applicant to be in the same document as the disclosure.

Pre-adverse action notice
Assuming the background report produces information that could negatively impact eligibility, the employer informs the applicant of their right to obtain a free copy of the report and their right to dispute the information contained therein. The employer must also provide a copy of their Summary of Rights, which affirms an applicant of his or her rights during the reporting process under the FCRA.

Wait a reasonable period of time
After a Pre-Adverse Action Notice has been issued, the employer must wait a reasonable amount of time before disclosing to the applicant that their application has been denied. “What constitutes a ‘reasonable amount of time’ is not clearly defined by the FCRA,” Sichterman explains. “But many carriers follow an 8-10 day waiting period to give the applicant enough time to contest inaccurate information.”

Adverse action notice
After a reasonable amount of time has passed and it’s clear the applicant has chosen not to contest, the employer must then tell the applicant they are no longer under consideration for employment.

The employer must also provide the contact information of the vendor used to generate the report, as well as a statement that explains the vendor is not responsible for the outcome and therefore cannot disclose the reasoning behind the employer’s final decision.

What does this mean for trucking companies?

There appears to be an assumption in the industry that motor carriers are largely exempt from FCRA regulations. 

In reality, the FCRA only makes certain accommodations for motor carriers to better meet the specific challenges they face. DriverFacts recommends companies follow these motor carrier provisions to keep in compliance: 

·         Because so many drivers apply over the phone or online rather than in person, intent can be issued by mail, telephone, computer or other similar means

·         Applicant authorization for background screening can be oral, written or received electronically

·         The company must disclose before ordering the report and inform the driver they have the right to obtain a free copy and dispute CRA findings

·         No pre-adverse action notice is required, but adverse action notice (within 3 days) must say:

o    The application rejection was based on report

o    Must include contact information of the screening firm

o    Screening firm was not responsible for the decision and cannot provide the reason for the rejection

o    A free copy of the report can be requested and therefore disputed with the screening firm

o    If a free copy is requested and proper identification provided (within 3 days), the employer must provide the report and the FCRA Summary of Rights

Case in point

Boyd v. CEVA Freight, LLC, 2013, U.S. Dist. Lexis 169514 (E.D. Va. November 27, 2013)

When one driver applied online for a truck driving position with CEVA, LLC, his application was rejected due to what the company claimed were conflicting dates on his previous employment. 

Because the driver maintained he never received advance notice regarding his background check and the company failed to provide a copy of his Summary of Rights, the court ruled in his favor, reinforcing FCRA guidelines to all DOT-regulated companies.  

The spike in litigation against employers

There is currently a significant increase in FCRA litigation against employers. The most commonly alleged violations are: 

·         Disclosure not stand-alone or confusion caused by release language

·         Insufficient pre-adverse action disclosure or process

Why is this happening?

Compliance is difficult for carriers because local laws pertaining to FCRA vary per state. This poses additional difficulties for national companies who are only trying to keep up.

Therefore, many carriers who face litigation plead under the willful violation theory.

What’s the difference?

Willful violation

·         Actual damages or statutory damages ($100 - $1,000)

·         Punitive damages

·         Attorneys’ fees and costs

Negligent violation

·         Only actual damages; no statutory damages

·         Proving actual harm

·         Attorneys’ fees and costs

To further complicate matters, courts remain divided and operate under their own interpretations.  

Ban the Box

Ban the Box is a national movement aimed at convincing employers to remove the criminal record check box from their applications. Ban the Box supporters push for this information to be disclosed after a company has made the decision to move forward with a hire so that all applicants have a level playing field.

In the past five years, Ban the Box legislation has exploded in private sectors nationwide. But like most regulations, BTB laws vary by location and may not apply to some employers.

Should your company ban the box?

Whether you determine asking applicants to disclose criminal history is a necessary or an unnecessary risk, it’s important to be consistent. After checking with your local counsel, be sure to follow the same steps with each applicant.

If you do decide to ask for disclosure, carefully consider when and how the question should be asked.

The information you receive from applicants is PI data—Personal Information. As the employer, it is your responsibility to protect this information at all times, during the application process and beyond.

What does the EEOC say about arrest & conviction records?

In 2012, the Equal Employment Opportunity Commission released its long-awaited guidance on arrest and convictions records:

Arrest Records

·         Employers cannot rely on the mere fact of any arrest but may rely on conduct suggesting unfitness

Conviction Records

·         To satisfy the standard, the policy must “effectively link” specific criminal conduct—and its dangers—with the particular job through:

o    Formal validation under the Uniform Selection Guidelines; and

o    Targeted screen

·         A company can determine on its own the eligibility of an applicant with a conviction record by using an individualized review

It’s important to remember EEOC’s suggestions should be viewed as “guidance” only, not law.

Multi-state applications

How can multi-state employers continue to use a single employment application? Because regulations vary by location, it’s in your company’s best interest to seek advice from your local counsel. Separate applications may be necessary.

How can your company streamline compliance efforts?

There are additional steps you can take to streamline your company’s compliance efforts. DriverFacts recommends:

  • Forming a “working group” by designating Subject Matter Experts (SMEs)
  • Considering a privileged program audit with the objective of examining FCRA compliance and identifying opportunities to fortify within the company
  • Evaluating whether the identified opportunities “make sense” for your company

Hiring in today’s industry

“The challenge in recruiting is that—up until recently—most carriers didn’t even think they had to abide by these regulations,” Sichterman says. “So it’s become a learning process.”

The recruiting game is changing every day, and litigation presents serious risks and repercussions to your business. Always seek the advice of local counsel to ensure you’re in proper compliance with FCRA law—so you can spend more time enjoying what you loved about the transportation industry in the first place…the people who power it!

About DriverFacts

DriverFacts automates DOT-mandated work history requests to free motor carriers from the traditional methods of processing hiring materials. We work with our members as an extension of their own compliance department, providing a customized, accurate and trusted service that guarantees the receipt of information in a cost-effective and timely manner. Enjoy paperless storage, automatic image archiving and DOT compliance while retaining ownership of your data. DriverFacts is designed to drive employee efficiencies and save valuable time, money and resources.

For more information on DriverFacts:

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