The Importance of Running Background Checks.

Employers generally recognize that there is a need to run background checks on prospective employees. But, sometimes after an interview or because of a time crunch, this simple detail is overlooked. A story reported by ABC News out of California on June 26, 2014 on a nanny who refuses to work and leave the premises serves as a good reminder of the need to run comprehensive background checks on prospective employees.[1] As reported by Sarah Figalora, 
A California family is stumped about what to do with a live-in nanny they say refuses to work, refuses to be fired and refuses to leave.

In fact, Marcella Bracamonte claims that the nanny, Diane Stretton, has threatened to sue the family for wrongful firing and elder abuse. . . .

 Bracamonte called the police, but the cops declined to do anything, saying it was a civil matter. Lt. John Moore of the Upland Police Department confirmed to ABC News that there is no immediate action that can be taken against Stretton, saying "generally, once somebody has established residency, you have to go through a formal eviction process.”

Bracamonte soon realized that this was not Stretton’s first time with legal matters. Stretton reportedly has been involved in 36 lawsuits, landing herself on California’s Vexatious Litigant Lists for repeatedly abusing the legal system.
While the experience of the Bracamonte family is certainly unusual, it serves as a good example of the need to run thorough background checks on employees and to double check references. Employees do misbehave and are often the cause of data breaches and other security lapses. See for example, Former Employee of a Florida Medical Center Pleads Guilty to Identity Theft.

Aside from issues related to identity theft, employees with access to company funds have also been prosecuted for embezzlement.  For example, in the dental space, it is often stated that three out of five dental practices are being embezzled from. Further, in a 2012 Ponemon Institute report, the organization found that "[o]n average, it takes 87 days to first recognize that insider fraud has occurred and more than three months (105 days) to get at the root cause of the fraud [and that according] to 73 percent of respondents, an employee’s malfeasance has caused financial loss and possibly brand damage."[2] With the costs of data breach notification and remediation increasing, these are pretty frightening statistics that all business owners should take to heart (particularly those where employees have misused information to commit identity theft).

While running background checks is important, they must also be done in accordance with both federal and state legal requirements. It is important to remember that any background check must be job-related and consistent with business necessity.The Federal Trade Commission and the Equal Employment Opportunity Commission (EEOC) have been particularly active in this space recently, because of their concerns that employers are using criminal background checks to exclude applicants. As the EEOC and the FTC have clarified:
Except for certain restrictions related to medical and genetic information (see below), it's not illegal for an employer to ask questions about an applicant's or employee's background, or to require a background check.

However, any time you use an applicant's or employee's background information to make an employment decision, regardless of how you got the information, you must comply with federal laws that protect applicants and employees from discrimination. That includes discrimination based on race, color, national origin, sex, or religion; disability; genetic information (including family medical history); and age (40 or older). These laws are enforced by the Equal Employment Opportunity Commission (EEOC).

In addition, when you run background checks through a company in the business of compiling background information, you must comply with the Fair Credit Reporting Act (FCRA). The Federal Trade Commission (FTC) enforces the FCRA.[3]
Aside from federal laws, many states also have laws addressing pre-employment background screening. In Florida, for example, Chapter 435 of the Florida Statutes addresses employment screening. Some states also have laws addressing whether social media information may be used as part of pre-employment screening.


A Few Outside Resources:
-----------------------------
[1] Sarah Figalora, Family Stumped by Fired Live-In Nanny Who Won't Leave, ABC News, Good Morning America, June 26, 2014, https://abcnews.go.com/US/family-stumped-fired-live-nanny-leave/story?id=24316229.

[2] Press Release, Ponemon Institute, Ponemon Survey Indicates the Growing Threat of Insider Fraud Not a Top Security Priority for Organizations, Proves a Costly Mistake (Feb. 28, 2013), available at https://www.ponemon.org/news-2/49.

[3] EEOC, Background Checks - What Employers Need to Know, A joint publication of the Equal Employment Opportunity Commission and the Federal Trade Commission, https://www.eeoc.gov/eeoc/publications/background_checks_employers.cfm (last visited June 29, 2014).
---------------------

Posted by: Tatiana Melnik on June 29, 2014