Transcript Slide 1

Format of This Presentation
• This PowerPoint has 20 slides, & my
presentation handout has 13 pages.
• Because some of this information is so
dense, I’ll take questions & entertain
discussion at ANY TIME, EVEN NOW. So,
I’ll use this PowerPoint as a launch point
for discussion, but not to lecture.
© 2009 All Rights Reserved, Charles A. Krugel; # 2
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
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
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
3rd Party Background Checking
Companies Versus Doing-It-Yourself
• Federal background checking laws GENERALLY
apply when a company uses a 3rd party provider;
not when it conducts the check itself using the
web or other means which don’t 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 3rd party provider, so long as the provider
is qualified & competent.
© 2009 All Rights Reserved, Charles A. Krugel; # 5
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, who’s 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
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
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 2006.
© 2009, All Rights Reserved, Charles A. Krugel; # 8
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 didn’t hire based on what they learned of the
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
Possible Legal Causes of Action in
Workplace Online Communications
4th Amendment personal privacy rights
1st Amendment freedom of speech
Copyrights, patents, trademarks, secrets,
• Defamation, libel, slander
• Contract (employment, union, etc.)
© 2009 All Rights Reserved, Charles A. Krugel; # 10
True Stories About Online Communications
Krugel’s 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 . . . .
I’ve attached all the email correspondence we’ve had pertaining
to this candidate & I’d 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
© 2009 All Rights Reserved, Charles A. Krugel; # 11
True Facebook Story 8/9/09 – The Danger of “Friending”
Your Boss from
© 2009 All Rights Reserved, Charles A. Krugel; # 12
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 wouldn’t an employer or recruiter
consult such free resources that might
provide such valuable information?
© 2009 All Rights Reserved, Charles A. Krugel; # 13
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
– 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
Sample Policies Continued
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
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
Sample Policies Continued
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 isn’t to intimidate or censor employees. The
purpose is to ensure that our branding & image remains consistent in the public’s
eye, & that we’re 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
Sample Policies Concluded
Use of our phones, computers, faxes, Internet,
etc., for personal use (i.e., anything that doesn’t
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
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,
that’s 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
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
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,
we’re 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