Background Checks

Worries about personnel integrity are creating a few worries of their own.

After her interview with a large accounting firm, Lila Beckford got a verbal offer for a job as a senior financial consultant. Told to expect a written offer pending a background check, she signed the required authorizations allowing her potential employer to search her credit reports, criminal background, references, and other data sources.

Then she got a call. The background check had turned up a “blip”: a civil suit had been filed against her. The manager apologized profusely, but explained that the firm couldn’t make a written offer until the case had been resolved. The problem was, says Beckford, she hadn’t been sued. The true subject of the lawsuit was the current resident at Beckford’s previous residence. The background-screening company had made an error. Once Beckford explained the mistake, the accounting firm checked again, and eventually offered her the job.

In response to 9/11 and the rash of accounting scandals, companies have increasingly relied on background checks for prospective employees. Generally conducted by a third party, basic checks include checks for a criminal record; date, source, and subject of educational credits; and dates and places of prior employment. But more and more often, companies are also gathering information on credit history, civil litigation, motor-vehicle record, even “mode of living” and character.

For some jobs, obviously, such extensive checks are essential. No one wants a taxi driver with multiple driving violations or an assistant controller with a record of bounced checks. But given how many more background checks are being conducted — ADP Screening and Selection Services reported a 65 percent jump between 2001 and 2004 — companies may be going overboard.

Apart from the philosophical question of whether this practice violates an applicant’s right to privacy, widespread use of elaborate background checks poses several problems for employers. First, errors are common; in fact, screening companies are required to warn their customers of that possibility. Second, theft of confidential information may leave employers vulnerable to lawsuits. And third, to a surprising degree, background checks fail to identify potential wrongdoers, while disclosing much information that is irrelevant to job conduct.

What’s Job Related?

In Beckford’s case, employment experts say the company should probably not have cared even if the suit had been filed against her. (Beckford’s employer declined to comment.) The Equal Employment Opportunity Commission, which enforces antidiscriminatory employment laws, has stated that any fact an employer uses to deny employment should be job related, and experts think that civil suits usually don’t pass the test. “I don’t believe that civil searches are job related,” says Barry Nadell, president of Chatsworth, California-based InfoLink Screening Services. “If you do a civil search, you have to be ready to defend the job-related aspect of it. I see a lot of employers gathering information even though they can’t explain why they need it,” says Philip Deming, principal of Philip S. Deming & Associates in King of Prussia, Pennsylvania, a security and human-resources firm.

“Using any of the search services,” like LexisNexis, says Deming, “you can get information on whether a person has ever had a foreclosure, been sued or arrested, or if he lives with someone he isn’t married to — data that isn’t relevant to a job but still makes an impression on a potential employer.”

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