Privacy Issues in the Community College Workplace

Employer Tips : Employers should determine which positions in their agency still allow use of credit reports in connection with employment decisions. They should also re-visit the notice forms they currently use to comply with notice and disclosure provisions and update them to include the new notice requirements. Districts should keep in mind that Fair Credit Reporting Act and the Investigative Consumer Reporting Agencies Act also impact many other aspects of the background investigation process as discussed below. a. The Fair Credit Reporting Act The Fair Credit Reporting Act (FCRA) 47 is federal legislation that not only restricts the use of credit reports, but also impacts an employer’s conduct of reference checks if the employer utilizes the services of a third party to conduct the reference checks. If an employer conducts reference checks itself, and does not employ the services of a consumer-reporting agency, the employer is not subject to the FCRA.

The FCRA governs the requisition, distribution, and use of “consumer reports,” which, by definition, must be prepared by a “consumer reporting agency”:

 A “consumer report” is statutorily defined as “any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living” which is used or expected to be used for, among other purposes, “employment purposes.” 48  The FCRA defines “consumer reporting agency” as “any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility on interstate commerce for the purpose of preparing or furnishing consumer reports.” 49

A reference check that is performed by an employer, and is not performed by a consumer-reporting agency, does not fall within the definition of a consumer report and is not governed by the FCRA. Public employers are generally not consumer reporting agencies. On the other hand, if an employer hires a third party, such as a private investigator, to conduct its background and/or reference checks, that person or entity likely meets the definition of a consumer reporting agency. 50 Damages are available for willful and negligent violations of the FCRA. 51 However, employers should note that liability may be avoided in certain cases where reasonable procedures are developed by an employer to assure compliance. 52

Privacy Issues in the Community College Workplace ©2019 (c) Liebert Cassidy Whitmore 22