Errors on a job background check
Employment background check companies are consumer reporting agencies under the Fair Credit Reporting Act. They must use reasonable procedures to make their reports accurate, and the employer must give you a copy of the report and a summary of your rights before it takes adverse action based on it. If a wrong criminal record or history cost you a job, you may be able to sue the screening company, and in some cases the employer.
Employment screening reports are built fast and cheaply, often by matching a name and date of birth against court databases. The common failures follow from that: a stranger's conviction attached to you, a dismissed case reported as a conviction, one case reported three times, a sealed record that should never have appeared. The Fair Credit Reporting Act covers these companies the same way it covers the credit bureaus, and adds a rule for the employer: you get to see the report before the job is gone.
What it looks like
- Someone else's record. A conviction for a person with your name, or a similar name and birth date, reported as yours.
- A dismissed case shown as a conviction. The report lists the charge but not the dismissal, or shows the wrong disposition.
- One case reported several times. The same arrest appears as separate entries from county, state and federal searches.
- Sealed or expunged records. A record that a court sealed still appears.
- Wrong work or education history. Dates, titles or degrees that do not match what you gave the employer.
- No warning before the rejection. The offer was pulled with no copy of the report and no summary of rights first.
The law
The screening company
A background check company that furnishes reports to employers for a fee is a consumer reporting agency (15 U.S.C. § 1681a(f)). It "shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates" (§ 1681e(b)). Matching on name alone, or reporting a charge without checking for its disposition, is where these cases are fought.
It must reinvestigate a dispute within 30 days (§ 1681i(a)(1)), and on request must notify anyone who received the report for employment purposes in the prior two years that an item was deleted (§ 1681i(d)).
Federal reporting limits apply: civil suits, judgments and arrest records may not be reported after 7 years, or the limitation period if longer (§ 1681c(a)(2)), and other adverse items after 7 years, except records of convictions of crimes (§ 1681c(a)(5)). None of these limits apply to a job paying $75,000 a year or more, the salary threshold in § 1681c(b)(3).
The employer
Before it gets the report, the employer must give you a clear and conspicuous written disclosure, in a document that consists solely of the disclosure, and get your written authorization (§ 1681b(b)(2)(A)). Before it takes adverse action based in whole or in part on the report, it must give you a copy of the report and a written description of your rights (§ 1681b(b)(3)(A)). This pre-adverse action notice is your chance to show the report is wrong before the decision is final. A modified rule applies to certain transportation jobs applied for by mail, phone or computer (§ 1681b(b)(3)(B)).
After the decision, the employer must also give you notice of the adverse action, the name and contact information of the screening company, a statement that the company did not make the decision, and notice of your right to a free copy and to dispute (§ 1681m(a)).
What you can recover
For a willful violation, actual damages or statutory damages of $100 to $1,000, plus punitive damages as the court allows (15 U.S.C. § 1681n(a)); for a negligent violation, actual damages (§ 1681o(a)). Willful includes reckless disregard (Safeco Ins. Co. of America v. Burr, 551 U.S. 47 (2007)). Actual damages in a lost-job case can include the lost wages and the distress of being branded with a record that is not yours. The FCRA requires a company found liable to pay the consumer's reasonable attorney's fees and costs.
A report that went to an employer has been disseminated to a third party, the kind of concrete harm the Supreme Court accepted in TransUnion LLC v. Ramirez, 594 U.S. 413 (2021).
What to do now
- Get the report. From the employer's pre-adverse action notice, or directly from the screening company, which must disclose your file and its sources (§ 1681g(a)).
- Tell the employer right away. In writing, that the report is wrong and you are disputing it. Ask them to hold the decision.
- Dispute in writing with the screening company. Enclose proof: a certificate of disposition, a sealing order, a copy of your ID showing a different birth date, diplomas or pay records.
- Keep the offer and the withdrawal. The offer letter, the pay rate, and the email or letter that ended it are the damages evidence.
- Talk to a lawyer. Bring every notice the employer sent, in the order you got them. Whether the pre-adverse action notice came first matters.
The clock
Earlier of 2 years from discovery or 5 years from the violation
An FCRA claim must be filed within 2 years after you discover the violation and no later than 5 years after it (15 U.S.C. § 1681p). See deadlines.
In New York, New Jersey and Florida
New York's fair credit reporting act bars an agency from reporting an arrest or criminal charge unless there was a conviction or the charge is still pending, and from reporting information it has reason to know is inaccurate (N.Y. Gen. Bus. Law § 380-j(a)). It also bars reports of convictions more than 7 years after disposition, release or parole (§ 380-j(f)(1)(v)), and gives consumers damages, costs and fees for noncompliance (§§ 380-l, 380-m). How the New York time limits interact with the federal Act is a legal question (15 U.S.C. § 1681t(b)(1)(E)). In New Jersey and Florida, the federal Act carries the claim. See New York, New Jersey and Florida.
Common questions
Is a background check company covered by the FCRA?
Yes, if it assembles or evaluates information on consumers for a fee to furnish reports to third parties such as employers (15 U.S.C. section 1681a(f)). Employment history is one of the files the Act names for nationwide specialty agencies (section 1681a(w)).
Did the employer have to warn me before rejecting me?
Yes. Before taking adverse action based in whole or in part on a background report, the employer must give you a copy of the report and a written description of your rights under the FCRA (15 U.S.C. section 1681b(b)(3)(A)). There is a modified rule for some transportation jobs applied for remotely.
Can an old arrest show up on my background check?
Under federal law, arrest records may not be reported after 7 years, but the limit does not apply to a job paying $75,000 a year or more (15 U.S.C. section 1681c(a)(2), (b)). Convictions have no federal time limit. New York law bars reporting arrests or charges without a conviction unless the charges are pending, and convictions more than 7 years old (N.Y. Gen. Bus. Law section 380-j).
Can I dispute directly with the background check company?
Yes. It must reinvestigate within 30 days like any other consumer reporting agency (15 U.S.C. section 1681i(a)(1)). Tell the employer at the same time that you are disputing.
Tell us what they did.
One conversation with an attorney, in your language. We tell you which laws the collector or the credit bureau broke, which deadline runs first, and what to save this week. If it is not a case we can take, we say so and tell you where to go.
(718) 484-7510The FDCPA and the FCRA require a company found liable to pay the consumer’s reasonable attorney’s fees and costs. Our fee arrangement is confirmed in a written retainer before we begin. English, Russian and Spanish in-house; an interpreter for any other language.