Questions to Ask When An Employer Fires or Terminates an Employee or Rejects an Applicant based on a Background Check

Here is what I typically look for in Background Investigation – Employment cases where an employer terminates an employee or refuses to consider or hire an applicant for employment based on a background check or credit report. The Fair Credit Reporting Act, a Federal law, has certain requirements that an employer and consumer reporting agency must satisfy if a consumer report of any type is used in the employment setting to take any type of adverse action against an employee or applicant.

  • Did the employer provide a disclosure of its intent to get a background/consumer/credit report prior to doing so?
  • Did the disclosure document consist only of the disclosure, with the exception of also providing for the signature on an authorization by the client (no releases, drug test waivers, indemnity provisions, etc., included with the disclosure/authorization)?
  • Did the employer get the client’s written authorization to obtain a background/consumer/credit report?
  • Did the employer obtain a report from a source that charged a fee or for other compensation of some form?
  • If the employer took an adverse action based in whole or in part on the report, did it provide advance notice of at least 5 days of its intent to take an adverse action and, with the advance notice, provide the client with a copy of the report and FTC summary of rights under the FCRA?
  • If the report included public record information, did the reporting agency send the client a letter with a copy of the report, summary of rights and the name and date of the employer to whom it sent the report?
  • What damages are proximately caused by any of the above requirements?
  • Whether a consumer report was used may require separate analysis depending on the circumstances. The definition of a consumer report is pretty broad though.

The standards of liability are negligence or willful. Willful includes reckless disregard of someone’s rights.

The act permits recovery of actual damages which includes any economic loss and emotional distress according to the standard in your jurisdiction. If there are no actual damages, the act still provides for a court to award statutory damages between $100-$1000 if the violation was willful. If a willful violation exists, punitive damages are also available. If you prove either a negligent or a willful violation, the act provides for recovery of attorney’s fees and litigation expenses.

Questions to Ask When An Employer Fires or Terminates an Employee or Rejects an Applicant based on a Background Check

Here is what I typically look for in Background Investigation – Employment cases where an employer terminates an employee or refuses to consider or hire an applicant for employment based on a background check or credit report. The Fair Credit Reporting Act, a Federal law, has certain requirements that an employer and consumer reporting agency must satisfy if a consumer report of any type is used in the employment setting to take any type of adverse action against an employee or applicant.

  • Did the employer provide a disclosure of its intent to get a background/consumer/credit report prior to doing so?
  • Did the disclosure document consist only of the disclosure, with the exception of also providing for the signature on an authorization by the client (no releases, drug test waivers, indemnity provisions, etc., included with the disclosure/authorization)?
  • Did the employer get the client’s written authorization to obtain a background/consumer/credit report?
  • Did the employer obtain a report from a source that charged a fee or for other compensation of some form?
  • If the employer took an adverse action based in whole or in part on the report, did it provide advance notice of at least 5 days of its intent to take an adverse action and, with the advance notice, provide the client with a copy of the report and FTC summary of rights under the FCRA?
  • If the report included public record information, did the reporting agency send the client a letter with a copy of the report, summary of rights and the name and date of the employer to whom it sent the report?
  • What damages are proximately caused by any of the above requirements?
  • Whether a consumer report was used may require separate analysis depending on the circumstances. The definition of a consumer report is pretty broad though.

The standards of liability are negligence or willful. Willful includes reckless disregard of someone’s rights.

The act permits recovery of actual damages which includes any economic loss and emotional distress according to the standard in your jurisdiction. If there are no actual damages, the act still provides for a court to award statutory damages between $100-$1000 if the violation was willful. If a willful violation exists, punitive damages are also available. If you prove either a negligent or a willful violation, the act provides for recovery of attorney’s fees and litigation expenses.

Claims for Vacation Pay On Resignation Induced by Employer’s Promise

If you accrued vacation pay during your employment and were otherwise entitled to use or get paid your vacation benefit, an employer may be obligated to pay that vacation benefit to you upon termination. An employer’s policies may affect this analysis. If the employer refuses to pay the vacation benefit upon termination, then it may be in breach of its work agreement with you. If you resign your position based on an employer’s promise that it will pay your vacation benefit if you agree to resign, and the employer then refuses to pay the vacation benefit, the employer may be in breach of that promise to you. Either way, if you have a reasonable expectation of getting paid the vacation benefit on termination because of a policy or express promise from the employer, and the employer does not pay the benefit, you may have claims that you can bring as wage claims under Wisconsin law. The Wage and Hour Bureau of the Equal Rights Division for the Wisconsin Department of Workforce Development should take a complaint on this basis. A private attorney can also enforce your rights.

Wisconsin Court Permits Employer to Fire Employee for Not Paying Back Overpaid Wages

The Wisconsin Court of Appeals, District II, issues an opinion on June 10, 2010, affirming a decision of a trial court that permitted an employer to terminate or fire an employee for not agreeing to pay it back for amounts that the employer overpaid her. Faraday-Sultze v. Aurora Medical Center of Oshkosh, Inc., __ Wis.2d __, 2009AP2429 (Wis. App. 6/2/2010). Wisconsin law prohibits wage deductions from the wages due or earned by any employee for defective or faulty workmanship, lost or stolen property or damage to property, unless the employee authorizes the employer in writing to make that deduction or unless the employer and a representative designated by the employee determine that the theft is due to the employee’s negligence, carelessness, or willful and intentional conduct, or unless the employee is found guilty or held liable in a court of competent jurisdiction. Wis. Stat. 103.455. Furthermore, an employer may not terminate or fire an employee for refusing to agree to such a deduction. Wandry v. Bull’s Eye Credit Union, 129 Wis. 2d 37, 384 N.W.2d 325 (1986). The court said that the public policy of the statute is to “prevent the employer from arbitrarily deducting hard earned wages at its prerogative.” The court in the Faraday-Sultze matter, however, found that since the employee did not earn the amounts the employer overpaid her, the law does not protect her.

Fired or Not Hired Because of Conviction or Arrest Record

What if you have a conviction or arrest record and an employer in Wisconsin does not hire you because of it? Well, you have rights. In Wisconsin, employers may not discrimination against an employee or applicant because of an arrest or conviction record. The exception is when the conviction substantially relates to the job. Also, if an employer intends to pull a background check on an employee or applicant, it must give notice, disclosure, to the person that it intends to do so and also get written permission from the employee or applicant to do so. Failure to either disclose or get written permission is a violation of Federal law, the Fair Credit Reporting Act. If a background report, even though accurate, is the basis for termination, not getting hired or other adverse employment action, the employer must abide by other notice and disclosure requirements. Most importantly, the employer must give advance notice of the termination, non-hire or other adverse action that it is going to take the action and that a report was used as part of its decision. The advance notice is so the employee or applicant can get a copy of the report, review and correct it if necessary. An employer must give notice of certain rights under the Federal law, in writing, when advising the employee or applicant of the adverse action. Failing to perform any of these obligations may give rise to a claim for damages against the employer or the agency that provided the employer a background report. Damages can include lost income, emotional distress or, if actual damages do not exist, statutory damages as determiend by a judge. The law also provides for the potential recovery of attorney’s fees and the cost of litigation.

New Law In Wisconsin Provides More Relief to Victims of Employment Discrimination

Act 20, passed in the Wisconsin legislature in 2009, added the ability to recover non-economic and punitive damages against an employer of 15 or more employees in Wisconsin that violates the Wisconsin Fair Employment Act. The change in the law permits a victim of employment discrimination to recover monetary damages for things like emotional pain and suffering, economic losses that go beyond lost wages, and where an employer acts in reckless disregard of the law, an amount of monetary damages to punish the employer and encourage it to comply with the law in the future. The new law affects violations of the WFEA that occur on and after July 1, 2009.

Attorney Gordon Leech

Representing Individuals in Consumer and Employment Matters

How Inaccurate Background Reports or Checks Affect Your Job

Background Reports or Background Checks that are inaccurate can cost you your job. These reports are often governed by the Fair Credit Reporting Act as a consumer report. An employer must disclose or tell you in writing that it will obtain such a report and it must get your permission in writing and in advance of obtaining such a report. Your permission must be requested in a single document, not combined with an application. If the employer takes some adverse action, like firing you from your job or not hiring you, based on information in the background report, then it must also inform you of this fact in advance of taking the action, give you a copy of the report and an opportunity to correct any inaccuracies. When an employer jumps the gun and fires or fails to hire without the advance notice and opportunity to correct, the employer is likely in violation of your rights under federal law. Such violations carry the right to recover damages.