June 2022 Newsletter

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 


Data Transfer to the US: Is Privacy Shield 2.0 in the Making?

In March, the European Commission and the United States announced a new data transfer mechanism, the Trans-Atlantic Data Privacy Framework. The framework is anticipated to include a new set of rules and binding safeguards, a new two-tier redress system to investigate and resolve complaints, strong obligations for companies processing data transferred from the EU and specific monitoring and review mechanisms.

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Humans are Incapable of Effectively Preventing Identity Fraud. Here’s How AI Can Help

There is a tremendous amount of pressure for humans working in identify verification to rapidly and accurately track potential signs of forgery. In addition, stricter documentation requirements are grouping innocent people in the same category as criminals. AI technology presents an extremely low margin for error and allows for the instant identification of any bias as it occurs.

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Federal Appeals Court Sides with Employer in Job Applicant’s Background Check Suit: 3 Steps to Avoid Similar Claims

According to the decision in Schumacher v. SC Data Center, Inc., a job applicant who didn’t disclose a felony conviction can’t sue her prospective employer under the Fair Credit Reporting Act (FCRA) for failing to provide proper notice before rescinding her offer. The ruling is good news for employers, but it is important to proceed with caution by not jumping to conclusions, documenting the process and reviewing local laws.

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Eighth Circuit Finds That Class-Action FCRA Plaintiff Lacks Article III Standing Under Spokeo

The Eighth Circuit’s decision in Schumacher v. SC Data Center, Inc., provides a reminder that employers who find themselves defending against Fair Credit Reporting Act (FCRA) claims should closely scrutinize whether plaintiffs have alleged mere procedural violations or the kind of concrete harm sufficient to open the doors to the federal courthouse.

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FCRA Lawsuits Up

CFPB complaints (+8.3%) and consumer litigation (FCRA +17.3%) all spiked by double-digit percentages in March. FCRA (+3.8%) is up YTD.

Putative class actions represented 4.8% of FCRA lawsuits filed last month. This percentages is up from the previous month. About 43% of all plaintiffs who filed suit last month had filed at least once before.

Complaint Statistics:
5984 consumers filed CFPB complaints, and about 1019 consumers filed lawsuits under consumer statutes from Mar 01, 2022 to Mar 31, 2022; 495 FCRA, 24 Class Action (4.8%).

Statistics Year to Date: 3025 total lawsuits for 2022, including 1441 FCRA.

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Don’t Fire Me! I’m Drug Free! It Was CBD! Indiana Court Examines Termination for Use of Hemp Oil

A federal district court in Indiana ruled that no federal legal protection exists for the employee’s use of CBD oil in Rocchio v. E&B Paving, LLC [YA1] [MS2]. When John Rocchio, an employee of E&B, tested positive for marijuana metabolites in his sys- tem, his employment was terminated due to a zero-tolerance policy. Although the employee argued that he did not use marijuana, it was his use of CBD oil that led to the positive test results. He filed a lawsuit claiming that E&B violated the ADA by terminating him and not rehiring him. The court found no ADA violation and granted the employer’s summary judgment.

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Marijuana Laws and the 2022 Workplace

With more and more states continuing to legalize cannabis for both medicinal and recreational use, employers should consider making decisions as to whether they will be guided by federal law, says Catharine Morisset, an attorney with Fisher Phillips. In some of the states that were the first to legalize recreational cannabis use, like Colorado and California, there are few job protections for off-duty use, but newer versions of the laws offer more job protections. Some offer protection for registered medical marijuana patients, but not recreational users, but others, like New Jersey and New York, provide employment protections for both. Marijuana is still listed as a Schedule 1 drug under the Controlled Substances Act and efforts to reform the law have stalled in Congress.

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To Test or Not to Test: Considerations for Employers Pondering the Future of Their Cannabis Testing Practices

The rapidly evolving legal landscape surrounding marijuana laws continues to present new challenges for employers, especially those who cover multiple states. Employers need to find ways to balance complying with conflicting federal, state, and local laws; maintaining a safe work environment; protecting applicants’ and employees’ privacy and other legal rights; and attracting and retaining quality talent. Some issues employers and their stakeholders should consider involve how to make sense of a positive test result; requirements to test for cannabis, such as for transportation industry and federal contractors; safety-sensitive positions; accommodating medical cannabis use; and job market considerations.

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Workforce Drug Test Positivity Climbs to Highest Level in Two Decades

Positivity rates for marijuana in the general workforce have continued to climb, increasing 8.3% for the highest positivity rate ever reported, based on more than 6 million urine tests. Over the last five years, the positivity rate has increased 50 percent. For oral fluid tests, that increase was 20.3 percent in a year and 68.2 percent over five years. Similar increases have been noted for cocaine and methamphetamine, as well.

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Federal Court Dismisses Disability Discrimination Suit Based on Employee’s CBD Use

A federal court in Indiana dismissed an employee’s lawsuit after he tested positive for marijuana due to CBD use and claimed that his termination violated the Americans with Disabilities Act (ADA). Rocchio of Rocchio v. E&B Paving, LLC, and Int’l Union of Operating Engineering Local 103, an engineer, tested positive for marijuana following a random drug test. His employment was terminated in accordance with the Company’s policy. The court disagreed with Rocchio’s argument that the employer violated the ADA when it took an adverse employment action against him, claiming the positive result was because of his use of CBD oil.

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Connecticut Legislature Passes Comprehensive Privacy Bill

Connecticut SB 6, which closely resembles the Colorado Privacy Act, has been passed by the Connecticut legislature and, if signed by the governor, would take effect on July 1, 2023. The bill’s requirements would apply to persons conducting business in Connecticut or persons that produce products or services that are targeted to residents of the state that meet certain thresholds.

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New York Enacts Employee Privacy Law

In early May, the New York Employee Privacy Law became effective, requiring employers to provide written notice to their employees prior to engaging in certain electronic monitoring activities. The law applies to any private business with a place of business within the state that uses an electronic device to monitor or otherwise intercept an employee’s telephone conversations or transmissions, electronic mail or transmissions, or internet access or usage.

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California Assembly Proposed Data Privacy Law for Workers

A new bill – the Workplace Technology Accountability Act, introduced by California Assembly Member Ash Kalra, would regulate employers, and their vendors, regarding the use of employee data. Employers that control the collection of employee data would be required to inform employees of how the employer plans to collect and use employee data at or before the point of collection and obligates an employer to provide, upon request, the specific data that the employer retains.

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Utah becomes fourth US state to enact comprehensive consumer privacy legislation

On March 24, Gov. Spencer Cox, R-Utah, signed the Utah Consumer Privacy Act into law, making Utah the fourth state to enact comprehensive consumer privacy legislation. The law goes into effect Dec. 31, 2023.

The UCPA is both similar to and different from the consumer privacy laws of California, Virginia and Colorado. Namely, it draws heavily from the Virginia Consumer Data Protection Act and several of its VCDPA-like components are also contained in the Colorado Privacy Act. At first glance, certain aspects of the law bear resemblance to the California Consumer Privacy Act. In practice, however, the substance of the UCPA takes a lighter, more business-friendly approach to consumer privacy than all three of its predecessors.

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What are the DOT Recordkeeping Requirements?

Motor carriers or any company that relies on drivers must follow the Federal Mo- tor Carrier Safety Administration (FMCSA) recordkeeping requirements in order to avoid the risk of violations, fines, and safety rating downgrades. Companies need to run pre-employment Clearinghouse queries for all new CDL drivers and must keep in mind drug and alcohol testing requirements, driver qualification file retention and vehicle maintenance requirements.

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Illinois Federal Court Holds that BIPA Applies to Photographs

An Illinois Federal Court has issued the latest plaintiff-friendly decision under the Illinois Biometric Information Privacy Act, putting businesses and employers on notice that the statute can apply to photographs in addition to the typically alleged facial and hand scans. Sosa v. Onfido, Inc., is one of several recent BIPA deci- sions, seemingly undermining the defense argument that a BIPA plaintiff must alleged facts demonstrating negligence, recklessness, or intent.

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Remote I-9 Inspection Policy Extended Once Again Until October 31, 2022

Immigration and Customs Enforcement (ICE) has announced a six-month extension of their remote I-9 inspection allowance. Employers who continue to practice social distancing may continue inspecting I-9 documents remotely for their newly hired employees and re-verifications of work authorizations until October 31, 2022. This virtual verification can only be used where the employer works exclu- sively in a remote setting due to COVID-19-related precautions.

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E-Verify Federal Contractor Numbering Change

E-Verify releases a change regarding new Unique Entity Identifier (UEI) Number Requirements for federal contractors. If you are a federal contractor, you should be aware that E-Verify has recently announced an update to its service that affects the numbering system you have used in the past. Effective April 4, 2022, the federal government will no longer use the Data Universal Numbering System (DUNS) number to uniquely identify federal contractors. As a result, federal contractors will be required to obtain a Unique Entity Identifier (UEI) number

from SAM.gov and update that number in E-Verify.

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What Employers Need To Know About I-9 Audits & Site Investigation

With a stronger push for immigration laws to be strictly enforced, American businesses are quickly learning the importance of being Form I-9 compliant. In the last few years, the nation has seen the number of government investigations into I-9 compliance almost quadruple. While a company may not be able to escape a government audit, it can be proactive in ensuring its I-9 compliancy.

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