Archive for the ‘Credit Checks’ Category

You may recall that I have blogged recently about EEOC complaints that credit checks on job applicants is potentially a violation of Federal discrimination laws. Well now there has been a class action lawsuit filed against the University of Miami based upon the credit checks it performs on job applicants.

The lawsuit, filed on behalf of Loudy Appolon of Miami, Florida, accuses the University of violating Title VII of the Civil Rights Act by rejecting or firing qualified individuals because of their credit background, even though credit history does not predict employment performance. In fact, there is no correlation between credit history and job performance or trustworthiness, and credit reports are often rife with inaccuracies.

Samuel R. Miller, a senior attorney at Outten & Golden LLP, said, “By all accounts, Ms. Appolon was well-qualified for the position – that’s why the University of Miami offered her the job. But instead of evaluating Ms. Appolon on an individual basis, as a person who – like many Americans today – may have struggled with and overcome some personal financial difficulties, and who showed promise to be an excellent employee, the Hospital stigmatized her based on her credit history. When companies act this way, they make it impossible for Americans to break the cycle of lending and bad credit, rebuild their lives, and contribute to their families and communities. And the employers hurt themselves by losing out on some of their best potential workers.”

Sarah Crawford, counsel with the Lawyers’ Committee for Civil Rights Under Law, stated, “The University of Miami’s policies and practices are illegal because they adopt and perpetuate the racial disparities in the credit system. We see this problem occurring in private and public employment across the country, despite the fact that employers, credit reporting agencies, and researchers have found no link between credit history and job performance. At a time when unemployment rates are skyrocketing, particularly for minority jobseekers, this unjustified and discriminatory practice only exacerbates the problem. Employers need to know that the practice is discriminatory and must end.” Ms. Crawford testified about the discriminatory effects of credit checks at an October 20, 2010 hearing of the Equal Employment Opportunity Commission.

According to the Complaint, “Defendants’ hiring policy duplicates the racial discrimination present in the credit reporting system . . . This discriminatory denial of employment affects not only the individuals who are rejected or terminated, but also their families and entire communities, replicating minority under-employment and compounding credit inequities in the process.”

The lawsuit alleges that Ms. Appolon interviewed for a senior medical collector position with the University of Miami, Miller School of Medicine in June 2009. She was offered the position, but the day before she was due to start her new job — after she had already resigned from her previous job — the University informed Ms. Appolon that she would not be hired because of her credit history. “I was shocked,” says Ms. Appolon. “I’ve worked in this industry for years, and my credit was never a problem.”

The case is “Loudy Appolon v. University of Miami, et al.” Class Action Complaint No. 1:10-cv-24166, in the U.S. District Court, Southern District of Florida.

If you have been denied a job based upon a background check on your credit history, you may want to speak with an employment lawyer to discuss your available legal remedies. Behren Law Firm can assist you with these types of issues.

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In the current job markplace, it has become increasing difficult to get a job. It is even more difficult for those with criminal backgrounds and or questionable credit or prior workers compensation injuries or claims. However, you should keep in mind that, if you are denied a job based upon any of these critera, you may have a legal basis to complain.

The Equal Employment Opportunity Commission has been cracking down on efforts to disqualify potential hires with criminal records or bad credit history, arguing that the practice can be tantamount to discrimination, as such applicants are disproportionately black or Latino. Justice Department statistics show that 38 percent of the U.S. prison population is black, compared with about 12 percent of the general population. In 2008, African Americans were about six times more likely to be incarcerated than whites. The incarceration rate for Latinos was 2.3 times higher than whites.

A blanket refusal to hire someone with a criminal record could run afoul of federal employment law, though. If criminal histories are taken into account, the EEOC says employers must also consider the nature of the job, the seriousness of the offense and how long ago it occurred. For example, it may make sense to disqualify a bank employee with a past conviction for embezzlement, but not necessarily for a DUI.

The EEOC indicated its disapproval of such practices last fall, when it it filed a class-action discrimination lawsuit against Dallas-based Freeman Companies, an events planning firm. The EEOC alleged that Freeman Companies used credit history and criminal records to discriminate against against blacks, Hispanics and males. Freeman has denied the charges, according to the AP.

You should also keep in mind that under Florida law and most other state laws, it is illegal to refuse to hire someone based upon a workers compensation claim or injury with a prior employer.

If a potential employer does perform a credit or criminal history check it must be done in accordance with the Fair Credit Reporting Act and you must have given permission to do so. If your work state does not have a law that prohibits or otherwise regulates an employment credit check on you (you should verify if your state has such a law), then the employment provisions in the Federal Fair Credit Reporting Act (FCRA) rule. The FCRA provisions regulate how employers obtain and use your credit report; for example, generally:

An employer must first inform you that someone will be conducting a credit check on you and get your permission in writing (unless you work in the trucking industry, in which case your permission might not be required). Technically, you may refuse to allow it; but, in reality, you might not keep your job or land a new one if you do that.

Before an employer may take an adverse action against you (e.g., eliminate you as a job candidate or fire you) based solely on a credit check, the employer must give you a “pre-adverse action disclosure” that consists of a copy of your credit report and a written summary of your rights under the Fair Credit Reporting Act.
After an employer has taken adverse action against you, the employer must then provide you with an “adverse action notice” and give you the contact information of the agency that provided your credit report, so that you may dispute inaccurate information.

An employer must keep the results of your credit check confidential and can’t store any information about it in your personnel file.

If you believe you have been wrongfully turned down for a job due to your criminal or credit history speak to an employment law attorney to evaluate your situation.

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