Delaware Employment Law Blog

Hiring managers have a lot of homework to do. Background and reference checks have become absolutely necessary steps in hiring today for a variety of reasons, which we've previously discussed.  One way many employers are getting the access they need to uncensored information on candidates is with the internet.  Especially where the job pool is largely college graduates, the internet can be a great tool for applicant screening.

But the information superhighway doesn't come with a road map and employers may not know exactly how to navigate the internet when it's being used as a hiring tool.  When William W. Bowser and I spoke about this issue last week in an audioconference, there was a significant amount of interest in a tutorial on the ins and outs of performing background checks online.  We're happy to oblige. 

Here is a run-down of the two of the way you can use Google for doing your own, online investigation of potential candidates.

Google

What:  Google is the most popular search engine in town.  It's actually quite a bit more than that, but you can check out our video tutorials on the other ways to use Google.  But, for this purpose, Google is just about as self-explanatory as they come.

How:  The quintessential websearch tool, just about everyone knows how to search via Google.com.  In short form, all you need to do is direct your web browser to www.google.com.  In the search box, type the name of your candidate.  Run a search for every iteration of the candidate's name.  For example, if you were going to search Bill Bowser, you'd use that version of his name, but also, "William Bowser", "William W. Bowser", and even "Bowser, Esq."  Be sure to use quotation marks to ensure you don't return search results for all websites that include the word "William."

What You'll Find:  Of course, it all depends on the candidate, but Google is likely to turn up more favorable results than unfavorable ones.  Sports achievements commonly show up in a Google search, for example.  For younger candidates, the results are likely to be limited in number and will most often be directly from a local newspaper or school publication.

When to Use It:  If you use it at all, Google is an excellent place to start when searching for public information on candidates.  It's also a good tool for gathering data that the candidate would proudly tell you if given the opportunity. 

Google Blogsearch

What:  Well, since you're reading this via our blog, I'll assume you have a basic understanding of the concept. But for the sake of equality with Nos. 1 and 3, I'll give a little summary.  "Blog" is a combination of the words "Web" and "Log."  Blogs began mostly as personal journals (or logs) maintained by individuals and used as a way to communicate their daily adventures to friends and family.  But, as the phenomenon has caught on, blogs are maintained by an enormous spectrum of individuals and entities for an even larger variety of purposes.  There are enough blogs that your candidates may be bloggers themselves, providing you with direct access to their uncensored opinions and commentary.

How:  The easiest way to search for blogs online is to use Google's blogsearch tool.  Basically, you're just doing a Google search but limiting the results to blog posts.  This can be done either direct from the Google home page by selecting "more" from the list at the top left side of the window, and then by selecting "Blogs" from the drop-down list that appears.  Alternatively, just go directly to http://blogsearch.google.com. 

What You'll Find:  You may find a blog hosted by the candidate, a blog post written by the candidate for someone else's blog, or a blog post about the candidate.  Any of these three are likely to give you meaningful insight into the candidate's personality, opinions, and, if nothing else, their communication skills.  For example, if hiring for a customer-service representative, an employer may have concerns about a candidate who uses an extraordinary amount of profanity throughout his posts.  Another serious red flag is an applicant who uses derogatory terms or expresses anger or hate towards any group.  This behavior should be major concerns to employers who want to avoid liability for discrimination and harassment.  It can also be indicative of violent tendencies.  And, given the fact that nearly $2 million American workers are victims of workplace violence every year, this must be a concern for employers, as well.

By as early as 2010, the Baby Boomers will leave the workforce en masse.  As the "reliable" generation heads towards retirement, employers will be faced with a substantial need for new recruits.  And those employers who have the foresight to plan ahead know that recruiting starts now.  Otherwise, there will be nothing but college grads and retirees.  To prevent the "brain drain," the need for mid-level managers must be factored into hiring and recruiting decisions now. 

More than ever, the hiring process is a critical element of success planning.  But hiring, of course, is no easy thing.  There are obstacles everywhere.  And, frankly, hiring should be a priority far beyond the Human Resources department.  It should be a priority for the C-Suite, too.  If senior management appreciates the fundamental need for good hiring decisions, there will be less resistance to implementing a full-fledged hiring program.  In an ideal world, all companies would have one. 

If you are one of the businesses fortunate enough to get buy-in from executive management, one of the best things you can do is to be highly selective in choosing the hiring team.  The authority to be involved in the hiring process, at any level, should be granted sparingly.  Treat the hiring team with the importance it deserves and don't let the undeserving join the team.

Select interviewers with purpose.  Not everyone should be permitted to interview.  Interviewing is hard. It involves a great deal of legal exposure. It's a great opportunity to capture the attention of the best and brightest--or to send them running out the door faster than you can say "signing bonus." 

Employers use Google, Facebook, and MySpace to conduct informal and unofficial background checks on job applicants.  But what about the employer's online reputation?  Learn how to monitor your online reputation, as well as your business' reputation using Google's free tool, Google Alerts.

http://www.slideboom.com/presentations/15998/Google-Alerts-by-Delaware-Employment-Law-Blog

FaceBook, MySpace, and other social network sites, have multiple uses. Of course, the traditional idea is that members gather to meet new people and share experiences.  As most recruiting and hiring managers are well aware, these websites can provide substantial insight into the personality and personal lives of job applicants. 

The value in this hiring strategy is subject to debate.  William W. Bowser and I will be debating it ourselves in greater detail tomorrow in our audioconference, Click Here for Lawsuit: Applicant Screening With Google and MySpace.  Employers must balance the need to make crucial hiring decisions with the privacy demands of Gen Y.  The arguments against using the internet's resources as the basis for employment decisions are shrinking, though.  And, if the trends continue, employers who do not utilize the web in hiring may find that they're alone in that decision. 

A survey released yesterday reports that the use of social networking has just begun to get off the ground outside America.  In North America last year, the number of users increased by 9% compared to an increase of 25% worldwide. 

Social networking has seen growth not only in the number of members, but also in the number of ways it has been put to use.  For example, the National Law Journal's article, Social Networking Sites Help Vet Jurors.  The article details how many lawyers now incorporate a Facebook-MySpace background-style check into their jury selections.  The information that is available online about potential and seated jurors can be invaluable in selecting jurors, striking potential jurors, and even in crafting opening and closing arguments that will hit home for the jury-audience.

What is remarkable about this trend is the revelations that often come with the discovery of an individual's FaceBook or MySpace page. Over and over, when social networking is used as a means to find out the "real" personality, behavior, and preferences of others, whether it be a job candidate or a potential juror, the "real" version is drastically different from the version presented to the searching party. 

On Thursday, William W. Bowser and I will present an audioconference on Applicant Screening With Google and MySpace.  We'll talk about whether the internet is a legal and ethical resource for use in the hiring process.  A necessary premise of the discussion, of course, is that applicant screening is a good idea in the first place.  Because, if it's not, we don't need to reach the Google-MySpace debate.  We believe that employers must make efforts to screen candidates before making their final hiring decision.   

1.  Resume Fraud.  An estimated 52% of applicants lie on their resumes.  If you are able to determine which applicants have misstated their credentials, you can eliminate them from the get-go without wasting any more time in the process.

2.  Limited Access to Information.  Employers do not want to provide any more information than what is required and are very hesitant to respond to a reference request.  But, at the same time, former employers often hold the key to the most relevant insight about the candidate.

3.  Background Checks Are Costly.  Many employers use an outside agency to perform background checks on potential employees.  And for good reason.  Background checks are complicated and time-consuming.  But, hiring an outside agency costs money and many small employers either cannot afford or have chosen not to dedicate the necessary resources to performing these checks.

4.  Compliance Issues.  Employers who do use an outside agency face their own set of problems.  The Fair Credit Reporting Act ("FCRA") set standards for employment screening conducted by consumer-reporting agencies and outside companies.  There is a list of compliance requirements triggered by the FCRA, including various disclosures an employer must make before, during, and after the background check has been performed.  The FCRA also carries substantial penalties for non-compliance. 

5.  Bad Apples Are Expensive.  Hiring is one of the most critical decisions a business will make.  Failure to carefully screen and select applicants can result in employees who are (1) not qualified to perform the work hired to do; (2) whose work habits are not in line with the organization's; (3) whose attitudes and personalities clash with coworkers, (4) hired under false expectations which later turns into poor morale and low productivity.  The U.S. Department of Labor estimates that the average cost of a bad hiring decision can equal 30% of the employee's potential earnings during the first year of employment.  But that estimate is low--many submit that the number is closer to 100% for non-management personnel and 150% to 200% for management. 

6.  Employee Theft.  The U.S. Chamber of Commerce estimates that theft by employees costs American companies $20 to $40 billion per year.  U.S. consumers absorb this cost at the yearly rate of $400 per working adult.  An employee is 15 times more likely than a nonemployee to steal from an employer.

7.  Claims of Negligent Hiring and Retention.  Employers can be sued and held liable if they fail to use reasonable care in the employment-selection process.  "Reasonable care" is dependent on not just whether the employer knew about the candidate's proclivities but also whether the employer should have known.  In short, failure to screen applicants and to use proper care in hiring can result in legal liability.

8.  Workplace Violence.  Some two million American workers are victims of workplace violence each year.  Certainly not every incident of violence could be prevented with applicant screening.  But if pre-employment checks could prevent a potential incident from happening in your workplace, wouldn't it be worth it?

9. Intellectual Property Concerns.  Intellectual-property theft is a very real concern, costing American employers anywhere from $200 million to more than $1.2 trillion annually.  As the workplace becomes more technology-based and employees become more technology-savvy, the risk of stolen trade secrets and other proprietary information will continue to escalate.

10.  Federal Anti-Discrimination Laws.  Of course, this is the biggest fear of most employers--that the person they hire will later "turn" on the company and file suit.  And there is good reason to worry.  Just ask Wal-Mart, which has been hit with several multi-million dollar lawsuits brought by employees in 2008 alone.

Anyone involved in hiring knows that there are some candidates who just don't seem to get it.  There are the applicants who "fluff" their resumes to the point of fantasy.  There are the candidates who ask totally inappropriate questions, or give positively unimaginable answers, during an interview.  And there are the ones who submit resumes that are so outlandish that you have to bite your hand to refrain from sending a copy to every person in the office. 

But now, thanks to Robert Half International's website, Resumania.com, you don't have to share the candidate's resume with the office.  Everyone can get a laugh that's not on the expense of the potential co-worker.

On the site, the global recruiting agency shares some of the best worst lines from resumes, accompanied by a little cartoon businessman who provides witty commentary.  Here are just a few from the site:

Resume Section:  SKILLS

Applicant's Statement:  Committed to meeting deadline

Commentary:  Just one?

Resume Section:  HOBBIES

Applicant's Statement:  Sit on my computer for hours

Commentary:  That must be uncomfortable

Resume Section: SKILLS

Applicant's Statement: Eager to learn innate abilities

Commentary:  That might be difficult

Resume Section:  COVER LETTER

Applicant's Statement: I would appreciate the opportunity to review my qualifications

Commentary:  Go right ahead

Resume Section:  OBJECTIVE

Applicant's Statement: To obtain a position that will allow me to utilize my strengths and reinforce my weaknesses

Commentary:  Are you sure that's a good idea?

The U.S. Citizenship and Immigration Services ("USCIS") released the new I-9 form in the end of June.  There weren't any changes to the form other than the expiration date.  Why bother, you ask?  Good question.  Initially, the Paperwork Reduction Act required it.  Under the Act, all government forms must carry an expiration date.  And the I-9 expired on June 30, 2008. 

But then, last week, it was announced that the "new" form was being retracted.  So, in case you are now twice as confused, here's the bottom line:  Any I-9 form with a publication date of 06/05/07 or later is acceptable.  Even if the expiration date has passed.  In other words, the expiration dates don't matter (for now, anyway).  But the publication date does. 

You can download the

The USCIS site also provides an I-9 form in Spanish.

Now, hang in there, this may be a little tricky.  Despite having it linked from its website, the USCIS will not accept the Spanish version. (Unless you live in Puerto Rico). Why bother posting it on the site, you ask?  Again, good question.  The idea is that you can provide any Spanish-speaking employees with the Spanish version of the form for their reference.  But the English version needs to be the one the employer actually retains.

Whew!  Good thing the Paperwork Reduction Act is here to help. 

Recruiting and hiring is difficult.  In fact, it's so challenging that there exists an entire cottage industry to service HR professionals who are glad to outsource the process.  Regardless of whether it is done in-house, by an outside organization, or some mix of both, no one has quite figured out why it is such a formidable challenge.  Until now, some say. 

If you haven't heard of him already, Malcolm Gladwell is, quite likely, the smartest man alive.  Certainly in my personal opinion.  A journalist by trade, Gladwell began writing for the New Yorker magazine in 1996.  He's known, among other reasons, for his two books: "The Tipping Point: How Little Things Make a Big Difference," (2000) and "Blink: The Power of Thinking Without Thinking" (2005), both of which were number one New York Times bestsellers.  He was also named as one of Time's Most Influential People in 2005.  And that should come as no surprise to anyone who has read his powerfully insightful books.

At the New Yorker Conference in May of this year, Gladwell was the opening speaker, much to my delight.  He addressed the problem of hiring and why we just don't seem to be getting it right. Very broadly speaking, he theorizes that no interview process, no personality test, and no skills assessment will ever give us the insight or "human element" that must be present to choose the right candidate. 

This idea is based on research he conducted involving recruiting in professional sports.  He details the various ways in which recruiters test athletes to assess every micro-function.  He then describes the horrific inefficiency of that process.  The test results are unreliable and, generally, predictive of nothing. 

The only way to really know if the candidate is a true "match" for your organization, he says, is to bring the candidate in, sit him or her down at a desk or behind a register, or on the sales floor, whatever the case may be, and let them give it a shot.  It will matter far more how they perform during that test run than any personality test when it comes to picking the right hires for your business. 

Don't take my word for it, though.  You can watch Malcolm Gladwell's speech at the New Yorker Conference and see for yourself.  I think the premise is infallible, despite its tendency to fly directly contrary to all modern presumptions about recruitment and hiring.  Of course, I do happen to believe he's the smartest man alive, so that probably helps with credibility.  Check it out, it's a fascinating talk.

Would you hire an applicant with a poor credit history?  And what if you hired a candidate who became an all-star employee who, you later learn, has a credit score of 550?  Would that make you think less of her as an employee?  Would you question her judgment or consider her high-risk?  Good Morning America asked all of these questions earlier this week.  And, according to the responses they received, credit history and credit ratings may have a greater impact on a person's ability to find work than you'd think. 

Are Credit Checks Really Being Used to Weed Out Potential Employees?

You bet.  Credit history is a standard part of many background checks, along with motor vehicle data, and drug testing.  Why?  Well, for some, there is no reason why.

Often, I'll review an employee handbook and come across boilerplate language providing for far-reaching background checks.  When I ask the employer what they're seeking to gain with this knowledge, it's very common for them not to have an answer.  They may have wanted to institute a pre-employment drug-testing policy and, when they located a vendor to handle the testing, for an additional small fee, the same vendor would also do background checks.

So, what the heck; a bargain is a hard thing to pass up.  And that's how their background-check policy came to be.

Why Employers Should Ditch the Credit Check

Putting aside the relatively low costs that could be saved, there are a number of reasons why credit checks aren't necessarily the best idea for your organization.  But here are two that come to mind immediately:  The FACT Act and the EEOC.

The Fair and Accurate Credit Transactions Act (also known as "FACTA"), was an amendment to the Fair Credit Reporting Act (FCRA), passed in 2003, primarily to help consumers fight the growing crime of identity theft.  Accuracy, privacy, limits on information sharing, and consumer rights to disclosure are all key elements of FACTA.

And, with FACTA, what you don't know can hurt you.  Employers are bound by a very detailed list of requirements when using credit checks as part of the hiring process.  For example, there are specific disclosures that must be made before and after the credit check is performed.  There are even rules on how an employer must go about destroying related documents.  And, no, these rules are not satisfied by tossing the records in the trash can.

The EEOC has long-maintained that criminal histories can be reviewed as part of the hiring process but cannot be a per se bar to employment.  Instead, if a background check reveals a criminal record, employers must engage in a "meaningful discussion" with the candidate and provide him or her with an opportunity to explain the circumstances of the instances involved and how he or she has changed, etc.

The same is true for credit checks. To avoid a claim of disparate impact, employers who do perform credit checks should remember that a negative credit history should not be an automatic bar to employment. Instead, they should give the potential hire a meaningful opportunity to explain the circumstances of the debt and how he or she has gone about making changes towards a more fiscally responsible future.

Then consider this explanation, coupled with how important or relevant credit might be to the specific job for which he or she has applied.  Weigh all of this before concluding that the credit history has a negative impact on the candidate's ability to perform the duties of the position.

Why Employers Should Keep Doing Credit Checks

Legal liability is real.  Negligent hiring lawsuits are very real.  An employer can be held liable for negligently hiring an employee the employer should have known was likely to violate the rights of another.  For example, if your organization employs technicians who drive from job site to job site, you really must do a motor vehicle's check.  If a technician gets into an accident because of reckless driving and seriously wounds or kills another driver, you may be held liable for his conduct if he'd been involved in numerous instances of reckless driving, which you did not know because you didn't do a background check.

The same idea applies in the context of credit checks. If you hire an employee who, it turns out, was embezzling company funds to finance a gambling habit, you may be on the hook if her actions caused harm to customers who, for example, bounced checks because of the embezzlement.  Had you done a credit check, it would have shown that, right before being hired, she had an erratic payment history, tending to show fiscal instability.  If an employee's actions hurt someone, the employer may be liable. The threat of liability gives employers reason to be cautious in checking an applicant's past. A bad decision can wreck havoc on a company's budget and reputation as well as ruin the career of the hiring official. Employers no longer feel secure in relying on their instinct as a basis to hire.

Start with honesty.  Studies estimate that anywhere from 30% to as much as 60% of employees lie on their job applications.  (This gives me an excellent opportunity to advocate, again, for the importance of having every employee fill out a job application).  Think of credit and background checks as a little test to see whether your candidates fit within that group. 

The law might require it.  For certain positions, federal and state laws require employers to complete certain background checks on employees after extending a contingent job offer.  FDIC-regulated banks, for example, have to comply with an extensive set of regulations during their hiring process.

My final piece of advice is this: 

Try to remember that the cobbler's children have no shoes. The reality is that, just because an employee can't manage her own credit does not mean that she can't manage yours.  Often, people who are very devoted to their work let their personal lives go untended.  So do not assume that a bad credit score equals a poor performance rating.

Related Resources

See GMA's original story, How Bad Credit Can Affect Job Prospects, by Tory Johnson.

And HR Hero has helpful resources on FACTA, as well.

John Phillips will be co-presenting a webinar on this very issue on July 17, Background Checks: Follow the Rules, Know the Risks, Reap the Rewards.

William W. Bowser and Molly DiBianca (that's me!) presented to the Delaware Contractors' Association's HR Committee today.  We spoke about the Employers' Free Choice Act, the RESPECT Act, the Delaware Construction Industry Independent Contractors' Act, E-Verify, and the recent FMLA amendment, the National Defense Authorization Act.  As promised, I'll post a link to the slides and the handouts for members of the DCA and anyone else who may be interested to view and download. 

Thanks to all of the attendees for participating.  The Human Resources Group, not surprisingly, was attentive, insightful and inquisitive with lots of great questions and comments.  Of the various topics discussed, though, it was clear that E-Verify was the show-stealer.  This, I think, is especially interesting, given that none of the participants are covered by the President's recent executive order, which made use of the E-Verify program mandatory for federal contractors.  The reaction tells me that the construction industry is either (1) looking forward to utilizing the electronic verification system; (2) dreading it as a worst-case scenario; or (3) are curious about just what E-Verify really is and how they might potentially be affected. 

So, in follow-up, here are some helpful "Dos" and "Don'ts" for using E-Verify, published by the Office of Special Counsel for Immigration-Related Unfair Employment Practices ("OSC"):

*available at usdoj.gov/crt/osc

And don't forget to check back tomorrow for the PowerPoint slides and handouts.

Prior Related Posts about E-Verify: 

Attention Government Contractors!! You Are Being Ordered to Use E-Verify!

GAO Says Universal Mandatory E-Verify Will Be A Challenge

Employers see confidence as a positive attribute in employees.  Confident employees make decisions without having their hands held.  They're not scared of change and innovation.  They don't involve themselves in petty workplace gossip--they don't need to--they have enough confidence that putting others down just doesn't do it for them.  But what some employees don't understand is that confident is different, entirely different, from egotistical. 

Some examples of the difference have been buzzing around the blogosphere lately.  This one is too priceless not to mention.  The following question was posed to J.T. & Dale, of "J.T. & Dale Talk Jobs":

I have been actively searching for a job for five months now, and can’t figure out why I get interviews but no offers. I have even contemplated the idea that I can’t get hired because I happen to be a very attractive, younger-looking 32-year-old. Am I crazy for even thinking that?

Umm, wow.  Ok, before I comment, here is Dale's response: 

A day or two before you go into a company for a job interview, park outside the office at lunchtime or after work and see how people dress and act. You aren’t dressing to look your best, you’re dressing to make potential co-workers comfortable around you.

I think this is great advice, especially the second sentence.  But I think that there is another lesson to be learned for employers, as well.  This is an excellent example of the "It Can't Be Me" response to rejection.  When a job candidate is not selected for the position, the automatic response is not,

"Well, there must have been another, more qualified, or better connected, or more educated candidate than me." 

Oh no, that would be totally unnatural. 

Instead, what they think is,

"What happened?  I was perfect for that job.  They really screwed this up.  They must have based their hiring decision on a clearly irrelevant factor such as [race/age/gender/religion/national origin/beauty]." 

And, clients and colleagues, thus begins a failure-to-hire lawsuit. 

Now, let's say that it was a man who interviewed her and, let's just say that, during the interview, he commended her for being so "put together" and noted the difficulties that women face in balancing home and work responsibilities.  If this young woman could conclude that she wasn't hired because of her extraordinary beauty, you can imagine how easy it would be for her to conclude that she wasn't hired because of her gender.  Again, thus begins a failure-to-hire lawsuit.

Source:  Am I Too Good Looking to Get Hired?  at J.T. & Dale Talk Jobs.  (Who score extra credit for not laughing hysterically at this question.)

Good documentation practices during the hiring process can help employers avoid a failure-to-hire claim.  And that's a good thing, considering that failure-to-hire claims are costly. Just ask Perdue.  The poultry company has agreed to a pay out of more than $800k to settle a claim of disparate impact arising from what the DOL concluded to be systematic discrimination against non-Hispanic job applicants. 

Disparate Impact Claim

A Labor Department news release states an evaluation in 2005 and 2006 by the Office of Federal Contract Compliance Programs (OFCCP) found the Salisbury-based company failed to comply with federal employment laws at its poultry processing plants in Rockingham, N.C., Dillon, S.C., and Monterey, Tenn. (The OFCCP has jurisdiction because Perdue supplies poultry under a federal contract to the U.S. Department of Agriculture.)

The settlement agreement will require Perdue to pay $800,000 in back wages and interest to 750 women and minorities who were not hired during the relevant time period.  The company also will make employment offers to some of those who were not hired but who are still interested in employment with Perdue.  In those cases, the employees will receive retroactive company service dates for purposes of benefits and promotion rights. 

Documentation Regrets

Perdue officials denied the allegations on the basis that many applicants were unqualified for employment or withdrew from consideration for employment.  They stated that the company agreed to a settlement only to avoid protracted litigation, according to the company. The VP of HR said in a company statement:

Perdue is committed to treating all job applicants fairly. We regret we did not more carefully document our hiring process for production associates, which led to these concerns by the OFCCP and, ultimately, to this settlement.

Perdue has implemented new procedures to ensure it retains all relevant documentation of its selection processes and is also conducting training of its human resources staff to assure appropriate implementation of Perdue's hiring and employment practices, according to the company statement.

Interviewing Best Practices

Interviewing is one of the most neglected areas in employment law.  When I teach seminars on lawful interviewing, I will inevitably see faces filled with shock and despair as they realize just how many of the best practices have not been implemented in their organization. 

Documentation is key in hiring.  If you keep notes and records only on the people you hired, you will have nothing to refer to in a failure-to-hire claim.  And let's be honest, the ones you didn't hire are likely the ones who were the least memorable.  Can you remember candidates you interviewed and rejected in 2005 and 2006? 

Without an established and consistent documentation and record-retention policy for the hiring policy, a failure-to-hire claim can be nearly impossible to defend.  Just ask Perdue.

Source:  Delaware News Journal, Gwenn Garland