Employment background checks help employers hire individuals with integrity whom they can trust, and who do not present a risk to the business, other employees, or the customers and clients that the business serves. Buyers in transactions may view target businesses that run background checks as lower risk for employee performance and retention issues. Background checks also constitute an important area for employment diligence in transactions because an employer or background check vendor’s failure to follow the hypertechnical disclosure and authorization requirements of the Fair Credit Reporting Act (FCRA) and other applicable state and local laws risks potentially material class action exposure and $1,000 penalties per violation. This article explores mitigation strategies that buyers may use in due diligence to identify and valuate potential FCRA exposure.
The FCRA requires that prior to procuring a background check on a job applicant, employers provide job applicants with a clear and conspicuous disclosure, made in writing and in a document consisting solely of the disclosure, regarding the fact of the contemplated background check. The FCRA also requires that employers obtain the job applicant’s authorization for the background check, which may be included in the same written disclosure.
Plaintiffs may recover actual damages for negligent violations of the FCRA, or statutory damages of $100 to $1,000 per each willful violation of the FCRA. Courts have...
Congress leader Jairam Ramesh criticised the Election Commission of India (ECI) on October 2 for appointing a committee to review ECINET’s compliance with legal provisions, describing the commissi...