Message from the Editor:
Welcome to another edition of ‘Inside Background Screening’ our new newsletter. Our goal is to bring to you cutting edge news and information about what is happening in the background screening world to help keep you informed and to position you to make the best possible hiring decisions.
We hope you enjoy ‘Inside Background Screening’ and that you will share your interest and thoughts with us.
Lorenzo Pugliano
CEO
Lpugliano@nsshire.com
EMPLOYMENT SCREENING NEWS
Know Before You Hire: Employment-Screening Trends in 2022
The pandemic’s effect on the labor market has caused some employers to delay or even drop employment screening from the hiring process and increasing marijuana legislation has led to the elimination of marijuana from pre-employment screening. But perhaps the year’s biggest challenge could be the redaction of identifying information provided by courts in two states with the possibility of more to come. Guidance on all subjects is patchy across the country, with cities, counties and states continuing to pass laws limiting the information that can be obtained by employers during the pre-employment screening process. “Ban the box” laws are designed to give people with criminal records a better chance at getting a job, but state and local jurisdictions are implementing their own unique requirements.
Ban on Salary History Inquiries to Expand to Federal Contractors
In March 2022, President Joe Biden issued the “Executive Order on Advancing Economy, Efficiency, and Effectiveness in Federal Contracting by Promoting Pay Equity and Transparency,” which directs the Federal Acquisition Regulation (FAR). Council to issue a proposed rule that “enhances pay equity and transparency,” and specifically limits or prohibits federal contractors from inquiring about and considering salary history information when making employment decisions. The regulation is the first salary history law with national application at the federal level.
Fair Chance Act: Restricting Timing of Criminal History Inquiries Begins to Take Effect
Contractors now are starting to be awarded contracts subject to 2019’s National Defense Authorization Act for Fiscal Year 2020, so it is important to remember a few of the requirements. The purpose of the Act is to delay inquiries into the criminal history record information of certain job applicants until later in the hiring process to provide a better opportunity for job applicants with a criminal history to compete for a federal job. Positions exempted from the Act’s prohibition on pre-employment criminal history inquiries include positions in which applicants are required by law to provide criminal history information prior to a conditional offer of employment; positions that require access to classified information, or involve sensitive law enforcement or national security duties; and any position identified in regulations issued by the Administrator of General Services or the DoD pursuant to the provisions of the Act. The Act only applies to federal contracts awarded under solicitations issued after December 20, 2021.
DRUG SCREENING ISSUES
10 Years of Cannabis Reform: Where Do We Go Next?
This year marks the 10-year anniversary of Colorado’s legalization of recreational cannabis use and the lack of marijuana education continues to lead to unanswered questions for employers, employees, and communities. Specifically, when employees began using recreational cannabis, employers were not taught several key factors, including that the window for peak cannabis impairment lasts only a few hours; cannabis tests of oral fluid, urine and hair provided positive results for days, weeks or months after impairment subsides; the relevance of cannabis detection windows and the need for a new technology that limits the detection windows and how to balance SAFETY + FAIRNESS or evolve their drug testing programs to maintain the proven benefits of deterrence and safety. Likewise, employees need to understand that they could lose their jobs if they exercise their legal right to use cannabis and that the consequences of arriving at work under the influence of cannabis risks their safety and that of their coworkers.
Fast, Clean, Accurate Alcohol Testing – The Future is Here
A 2020 Current Consulting Group survey revealed that the percentage of providers offering oral fluid drug testing soared and that many providers were interested in telehealth collections. The survey also showed that the legalization of marijuana in many states was moving employers toward non-drug-related fitness for duty screening methods. Concerns over the last two years have centered around being exposed to coronavirus when visiting a collection facility for a deep-lung air sample. One company, SOBR Safe, Inc., has developed a patent-pending, touch-based identity verification and alcohol detection system called SOBRcheck that does not require a breath, blood or alcohol sample and offers employers a hygienically safe and less invasive way to keep the workforce safe.
Lonza America to Pay $150,000 to Settle EEOC Disability Lawsuit
Lonza America LLC will pay $150,000 and provide other relief to settle a disability discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission (EEOC). The lawsuit charged that Lonza terminated a 14-year employee at a Tennessee plant after the employee twice tested positive for a legally controlled substance. The company knew the employee was a recovering opioid addict participating in a medication-assisted treatment program with a legal prescription for an opioid medication, yet they forced him into counseling with a clinical psychologist and based his return to work on his discontinued use of the medication.
Marijuana in the Workplace: Uncertainty and Risks for Employers
Employers are still facing uncertainty in New Jersey, trying to understand the Jake Honig Compassionate Use Medical Cannabis Act (CUMCA) and the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA). The two laws created a framework for the use and regulation of marijuana in the state, but recent lawsuits have brought to light the risks and uncertainty employers are still facing. Hunt v. Matthews International Corp. et al involves an employer that refused to hire an individual after a pre-employment drug screen returned a positive THC result, even though the applicant’s status as a licensed medical marijuana patient was previously disclosed. And the New Jersey Supreme Court addressed CUMCA in Hager v. M&K Construction, in which it was determined that medical marijuana prescribed to treat an injured worker may constitute reasonable and necessary care of the New Jersey Workers’ Compensation Act.
LEGAL ISSUES
Federal Court Finds Plaintiff Has Article III Standing in FCRA Suit Against Employer, In Reminder of Litigation Risk Arising from Background Screening
In the Fair Credit Reporting Act (FCRA) case of Derrick v. Full House Mktg., the Middle District of North Carolina found the plaintiff to have Article III standing to bring his claims in federal court, denying an employer defendant’s Motion to Dismiss. The plaintiff sued the defendant in the case because he was not provided a copy of his consumer report with a pre- adverse action letter and was unaware that it inaccurately stated that he had been found guilty of six felonies and misdemeanors. The defendant asserted a facial challenge, arguing that the plaintiff “has failed to articulate any injury” because an informational injury cannot confer Article III standing. The court, however, held that the plaintiff had sufficiently alleged that he suffered an injury in fact that was concrete and particularized and so had Article III standing.
Tech Transactions & Data Privacy 2022 Report: The FTC’s Expanding Role in Cybersecurity and Data Privacy Enforcement in 2022
The Federal Trade Commission (FTC) is a federal agency that works to protect consumers from fraudulent, deceptive and unfair business practices. The organization has been authorized by the government to enforce various legislation, such as the Health Breach Notification Rule (HBN Rule), the Standards for Safeguarding Customer Information under the Gramm-Leach-Bliley Act (Safeguards Rule), the Children’s Online Privacy Protection Act (COPPA) and the Fair Credit Reporting Act. In 2021, the FTC took two actions that signaled its desire to expand its role in setting and enforcing cybersecurity and data privacy standards, clarifying the scope of the HBN Rule and amending the Safeguards Rule to strength- en the data security requirements for financial institutions.
Pennsylvania Federal District Court Rules Public Records Vendor is Consumer Reporting Agency Subject to Fair Credit Reporting Act
In the case of McGrath v. Credit Lenders Service Agency, Inc., a Pennsylvania district court has ruled that a company that provides reports based on a search of public records is a “consumer reporting agency” (CRA) as defined by the Fair Credit Reporting Act (FCRA). When the plaintiffs in the case applied to a bank for a loan to refinance their home mortgage, the bank engaged Credit Lenders Service Agency (CLSA) to conduct a public records search on the plaintiffs and provide a report. The report erroneously listed outstanding civil judgments against the plaintiffs, who claimed they contacted CLSA, which refused to investigate the alleged inaccuracies. CLSA was sued for violations of the FCRA by failing to follow reasonable procedures to assure maximum possible accuracy when preparing a consumer report and by failing to conduct a reasonable reinvestigation of the plaintiffs’ dispute.
Federal Court Finds Plaintiff Has Article III Standing in FCRA Suit Against Employer, In Reminder of Litigation Risk Arising from Background Screening
In the Fair Credit Reporting Act (FCRA) case of Derrick v. Full House Mktg., the Middle District of North Carolina found the plaintiff to have Article III standing to bring his claims in federal court, denying an employer defendant’s Motion to Dismiss. The plaintiff sued the defendant in the case because he was not provided a copy of his consumer report with a pre-adverse action letter and was unaware that it inaccurately stated that he had been found guilty of six felonies and misdemeanors. The defendant asserted a facial challenge, arguing that the plaintiff “has failed to articulate any injury” because an informational injury cannot confer Article III standing. The court, however, held that the plaintiff had sufficiently alleged that he suffered an injury in fact that was concrete and particularized and so had Article III standing.
DATA PROTECTION & PRIVACY STATUS
US, EU Sign Data Transfer Deal to Ease Privacy Concerns
The European Union and United States have made a deal that business groups are saying will “provide relief to thousands of companies … that faced uncertainty over the ability to send data between the U.S. and Europe.” According to President Joe Biden, the arrangement will “enhance the Privacy Shield framework, promote growth and innovation in Europe and in the United States, and help companies … compete in the digital economy.”
Data Privacy is More Than Just Data Security
While data privacy centers around the right to share data and the way organizations must be governed and held accountable for the use of that data, data security is focused on the policies and procedures that a company must implement to safeguard data from any third-party unauthorized access. Companies that collect, store and/or manage someone’s basic information should become familiar with a few best practices. These include understanding the basics about what data is collected and why, whether that data is being sold or shared, and who that data is being sold or shared with. Data privacy, data governance and intellectual property framework based on data should be well established, documented, and cemented into policies and bills before economic partnerships are considered.
Hello, Utah Consumer Privacy Act!
The Utah Consumer Privacy Act contains more stringent applicability thresholds in comparison to other state laws, requiring controllers and processors to meet three prongs: 1. Do business in the state or targeting residents with products/ services; 2. Have annual revenue of $25 million or more; and 3. Data collection, processing, or sale/revenue thresholds. The Act establishes the Department of Commerce Division of Consumer Protection, which will receive and investigate consumer complaints alleging violations of the UCPA.
BIOMETRICS
California State Senator Introduces a BIPA-like Law to Protect Biometric Information
Senate Bill 1189 was introduced in February by State Senator Bob Wieckowski, aiming to add protections for biometric information in his state on top of other statutory provisions, such as the California Privacy Rights Act (CPRA). The bill would significantly expand privacy and security protection for biometric information in California and likely influence additional legislative activity in the United States. SB 1189 includes a fairly broad definition of biometric information and would apply to any private entity. It also could open the door to a wave of litigation.