Thumbs Up/ Thumbs Down, Still FCRA

By Bill Wright

Does your business use a contractor to provide in-home services to your customers? If so, you probably want the contractor to conduct background checks on its employees. You want the contractor to screen out people who pose high risk to your customers. But, if you get a summary of the background reports, just to make sure the contractor is complying with your requirements, you might have to comply with the Fair Credit Reporting Act. In a recent case, a business designed the background check it wanted its contractors to use and designated what kind of criminal and driving violations would disqualify the employees from assignment to the business’ customers. The consumer reporting agency also sent the business a summary of the background checks, indicating that the check had been done, who had been the subject of the check, and whether the person was high risk. That was enough to make the business a recipient of a credit report for employment purposes and subject to the FCRA. Ernst v. Dish Network, LLC, 12-Civ-8794 (LGS) (S.D.N.Y. September 22, 2014).

If you use contractors, think about how you are using credit check information.