An employer can deny you a job or fire you over a background check, but the Fair Credit Reporting Act sets the rules. You must get a standalone written disclosure and give written consent first. Before any adverse action, you’re owed a copy of the report and a summary of your rights. Screening companies can be sued for false, misleading, or legally barred information, including non-conviction arrests older than seven years.
A background check can cost you a job offer or the job you already have. But the federal Fair Credit Reporting Act (FCRA) puts strict rules on both the employer ordering the report and the company that prepares it. If either one skips a required step, or the report contains false, misleading, or legally barred information, you may have a claim.
How common are employment background checks?
Very. A 2018 report by the National Association of Professional Background Screeners found that more than 80% of employers run criminal background checks on every job applicant.
That matters because an estimated 65 million adults in the U.S. — close to one in four — have some kind of criminal record. For many of them, a single line on a report decides whether they get hired or keep their position.
What law governs background checks for employment?
The main one is the Fair Credit Reporting Act. The name suggests it only covers credit reports, but it also applies to criminal background reports — and it reaches both the employers who order them and the screening companies that compile them.
When public records are used to make a hiring or employment decision, the FCRA requires procedures that keep that information accurate and current. Those requirements are strictest when the record is likely to hurt someone's chances of getting or keeping work.
Does an employer have to tell you before running a background check?
Yes. Before ordering the report, the employer must give you a clear, written disclosure that a background report may be obtained for employment purposes. That disclosure has to stand alone in its own document — it can't be buried in a job application or mixed in with other paperwork.
The employer also needs your written authorization. No disclosure and signed consent, no report.
What must happen before you're turned down or fired over a report?
If an employer plans to take an "adverse action" because of something in your report — firing or demoting you, or, in most cases, declining to hire you — the FCRA requires it to give you three things first:
- A copy of the report itself
- A written summary of your rights under the FCRA, similar to the FTC's standard disclosure
- Notice that the decision may be based on what the report says
This pre-adverse action step exists so you have time to review the report and correct or explain anything wrong before the decision is final. If the employer goes ahead, it must then send a written "final adverse action" notice.
Can you get a copy of your background report in Minnesota?
Yes, and earlier than the federal process provides. Minnesota lets job applicants and employees request a copy of their background report at the moment they consent to it being prepared.
It's worth doing. Many people never read their report closely, and some lose a job over information that's false, misleading, or legally barred from being reported in the first place.
What are the most common background check errors?
Screening companies can be held liable for more than flat-out inaccuracies. A report that's technically true but misleading enough to affect an employment decision can also violate the FCRA. Errors that show up on criminal background reports include:
- Another person's record attached to your name
- Sealed or expunged cases that should never have been reported
- A charge listed with no mention of how it was resolved
- A misdemeanor reported as a felony, or any offense shown as more serious than it was
- Sentencing details that are wrong
Can old arrests show up on a background check?
Not if they're more than seven years old and never led to a conviction. The FCRA bars screening companies from reporting arrests or criminal charges that didn't result in a conviction once they predate the report by more than seven years. (The limit doesn't apply to jobs paying $75,000 a year or more.)
This rule carries real weight because so many arrests and charges end without a conviction. A screening company that reports one past the seven-year mark can be held responsible for it, along with the fallout it causes.
Can you sue a background check company over an inaccurate report?
Yes. The FCRA lets you bring a lawsuit against a screening company that produces a report containing false or misleading information, or information the law prohibits it from reporting.
What you can recover depends on the case. It may include compensatory damages, lost wages, punitive damages, and statutory penalties.
Can a background check policy be discriminatory?
It can. Title VII of the Civil Rights Act of 1964 and the Minnesota Human Rights Act (MHRA) prohibit employment practices that discriminate based on a protected status such as race, national origin, age, or sex.
Both laws cover two kinds of discrimination. Disparate treatment is driven by bias against a protected group. Disparate impact comes from a policy that looks neutral on paper but falls disproportionately on one group.
Criminal record exclusions and disparate impact
According to EEOC guidance, national data show that excluding people based on criminal records has a disparate impact by race and national origin. That gives the EEOC grounds to investigate Title VII violations when an employer's criminal record screening disproportionately shuts out applicants or employees from certain racial or national origin groups.
In those cases, the employer generally has to show its exclusion policy is "job-related and consistent with business necessity." The EEOC has more on arrest and conviction inquiries.
Pre-hire questions Minnesota employers can't ask
The MHRA also bars employers from requesting certain information before someone is hired, including race, religion, national origin, sex, color, marital status, sexual orientation, familial status, age, creed, disability, and receipt of public assistance.
That can collide with background check paperwork. Some employers ask for a date of birth to run a pre-employment check, and the Minnesota Department of Human Rights takes the position that this inquiry violates the MHRA. The MDHR publishes more on prohibited pre-employment practices.
Talk to an employment lawyer about your background check
If a background check cost you a job — or contained information that was wrong, misleading, or not allowed to be reported — Wanta Thome wants to hear from you. Our attorneys handle background check claims and offer a free initial consultation. Contact us to talk through what happened.
