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Blog & News

CIC offers news and updates to employers about the latest laws, trends and risks related to hiring, fraud, and drugs or violence in the workplace.

Adverse Action Process

Adverse Action remains a persistent issue for employers, a theme that CIC has emphasized throughout the years. The crucial process of Adverse Action, in situations where a candidate's employment is denied due to a background check report, is often mishandled.

It's not just about using the process but implementing it correctly. Over the past five years, the surge in Adverse Action lawsuits filed against employers has been alarming. Yet, the solution is surprisingly simple: correctly apply the Adverse Action process as detailed in the Fair Credit Reporting Act (FCRA).

Neglecting to strictly comply with FCRA rules can lead to disastrous consequences, particularly in the event of class action lawsuits. A recent case involving Petco culminated in a $1.2 million settlement. These mistakes could include not adhering to the process at all, skipping a step, or utilizing an outdated version of the FCRA Summary of Rights. Each has led to successful lawsuits costing employers millions.

CIC offers a service allowing clients to create Adverse Action letters directly from the screening portal, making the process much easier. Moreover, all of our background check reports come with the most recent FCRA Summary of Rights and Credit Freeze. The solution couldn't be simpler!

We strongly urge all employers to take the Adverse Action process seriously and exercise due diligence when denying employment based on a background check report.

Learn more about the Adverse Action process.

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