Social-Media Screening Company Runs Afoul of FCRA

Employers’ use of social media as part of the hiring process continues to make the news. Although much has been made of the nuances of the idea, cyber-screening can be performed lawfully and with positive results–when it’s done properly. When it’s not, though, there can be lots of significant consequences.

To avoid the risks associated with cyber-screening (or to combat a fear of the unknown, perhaps), some employers have turned the task to outside vendors. Instead of performing a Google search on a candidate as part of the in-house screening process, some employers are paying a third party to conduct the search as part of the background check.

I recognize that many companies feel that this reduces the risk that they’ll be sued for failure to hire. But the idea of outsourcing this process seems to significantly reduce the benefits. Employers like cyber-screening, in part, anyway, because it’s free and gives immediate results. Outsourced screenings cost money and take time.

And there’s another downside to using a vendor for this process. Once you involve a third party in the background-check process, you are obligated to comply with the very specific requirements of the Fair Credit Reporting Act (FCRA). If you use a vendor to perform background checks of any kind, you’re already familiar with these requirements. You also already know how important it is that you use a reputable vendor who will meet all of its obligations under the FCRA.

So maybe that’s why the Federal Trade Commission (FTC) is so ticked off at Spokeo, one of the handful of new businesses that market themselves as a social-media-search provider. The FTC’s complaint alleged that the company failed to follow the FCRA’s requirements when conducting its social-media searches on behalf of employers. The complaint also alleged that Spokeo’s managers encouraged employees to post online reviews of the company in violation of the FTC’s endorsement guidelines, reports Information Week.

Spokeo has agreed to settle the lawsuit but it’s going to cost ’em. The consent order that will resolve the suit, if approved, would require Spokeo to pay an $800,000 civil penalty and remain under Court supervision for 20 years.

This is quite a jump from the FTC’s recent approval of a different social-media screening company. So which is it–can employers outsource these searches safely . . . or not? What’s the lesson here for employers? Simply put–seek qualified legal counsel to help you ensure that your hiring practices comply with the law. Hiring is a critical component of the employment process and it is a worthwhile investment to get it right the first time around.

For more about the FTC’s endorsement guidelines, a critical component of any social-media policy, see:
Another Reason Employers Need a Social-Media Policy: New FTC Regulations
Turns Out FTC Actually Expects You to Follow Its Rules
FTC Is Not Amused by Employees’ PDA for Their Employees

Contact Information