June Newsletter 2021

Message from the Editor:

Welcome to another edition of ‘Inside Background Screening’ our new newsletter. Our goal is to bring to you cutting edge news and information about what is happening in the background screening world to help keep you informed and to position you to make the best possible hiring decisions.

We hope you enjoy ‘Inside Background Screening’ and that you will share your interest and thoughts with us.

Lorenzo Pugliano 


When Hiring Employees in Other States, Make Legal Compliance a Priority

Interviewing and working remotely has become an increasingly popular way to manage business, but it is not without risk. Although many employers assume employment policies apply the same to remote employees, this isn’t always the case, as laws of the state in which the employee is performing work come into play. Although some laws may be written in a way that excludes some employers, some begin at the initial phase of hiring, including “ban the box” and “salary history bans.” Fair Credit Reporting Act (FCRA) laws apply across the country, but some states may also choose to impose additional restrictions and notice obligations when it comes to obtaining a background check during hiring. Drug testing laws also vary significantly from state to state. Once on board, employers should consider wage laws, paid sick leave, meal and break requirements, vacation accrual and payout, business expense reimbursement, wage deductions, jury duty leave, voting leave, parental leave, direct deposit and noncompetition agreements.

Read more

Survey Reveals Americans Want Employers to End Discrimination Against Job Seekers with Criminal Backgrounds; Kelly CEO Encourages Companies to Act

According to a Kelly survey conducted as part of National Second Chance Month, seven in 10 Americans say employers should eliminate blanket bans automatically rejecting job seekers with minor, non-violent criminal offenses on their record. The survey findings show that Americans want companies to end discriminatory hiring practices and policies. Part of Kelly’s ongoing Equity@Work initiative, the research is designed to identify and remove systemic and rarely challenged barriers to work for millions of Americans. The survey of adults in the United States show strong support for second-chance initiatives.

Read more

California Courts (Again) Provide Guidance on What Qualifies as a “Standalone Disclosure” for FCRA Purposes 

The decision in Arnold, et al. v. DMG Mori USA Inc. out of the Northern District of California has reminded employers and background screening vendors that the disclosure form required by the Fair Credit Reporting Act (FCRA) to be presented to job applicants prior to conducting a background check for employment purposes cannot contain any “extraneous information.” Former employees of DMG Mori USA, Inc. (DMG) filed the class action, claiming that in the course of obtaining background reports about them, the company presented them with a disclosure form that violated the FCRA. The court concluded that DMG’s disclosure form did not meet the FCRA requirements for several reasons.

Read more


FCRA Claim Survives Dismissal Where Plaintiff Alleges Defendant Did Not Have a Permissible Purpose to Access Plaintiff’s Credit Report Based on Prior Discharge of Mortgage Debt in Bankruptcy

A motion to dismiss a Fair Credit Reporting Act (FCRA) claim has been dismissed by the Northern District of Illinois. The court found that the complaint sufficiently alleged that the defendant did not have a “permissible purpose” to access the plaintiff’s credit report for collection of a mortgage debt that the plaintiff alleged was previously discharged in bankruptcy. The plaintiff in Andrea Billups v. PHH Mortgage Corporation alleged that the defendant mortgage server violated the FCRA by obtaining her credit report on a debt that was discharged through her prior bankruptcy.

Read more

Court Approves $1.375 Million FCRA Class Action Lawsuit Settlement

The plaintiffs in Bailey and Carrasco Jr. v. Romanoff Floor Covering, Inc., claimed the defendant violated the Fair Credit Reporting Act (FCRA) by misusing consent forms to improperly run background checks. A California federal court approved a settlement of $1.375 million in the class action lawsuit, which includes individuals who worked for the defendant in California from March 30, 2013, to May 1, 2018, while the FCRA Class includes prospective employees for whom the defendant procured a background check from March 30, 2012, to April 5, 2017.

Read more


NY Marijuana Laws – Clearing the Confusion for Employers

Three New York laws – two state laws and one city ordinance in New York City – limit employer action regarding marijuana use by employees. There are key differences between the state’s anti-discrimination rules and the city’s prohibition of pre-employment marijuana testing. Employers in both the state of New York and New York City should become familiar with new rules that may impact the company’s drug and alcohol testing program. The laws include the Medical Use of Marijuana, Adult Use of Marijuana and Pre-employment Limitation of Marijuana Testing (NYC). State rules apply to all applicants and employees, while city laws apply to pre-employment testing for marijuana. New York City’s rules provide a safety-sensitive position carve out, while New York State rules do not offer safety-sensitive exemptions.

Read more

Philadelphia Set to Ban Pre-Employment Marijuana Testing: What Employers Need to Know

If approved by the major, a new law will go into effect in Philadelphia on January 1, 2022, that would prohibit employers from testing prospective employees for marijuana. Most employers will be prevented from rescinding a candidate’s job offer due to the presence of marijuana in a pre-employment drug test. Employers would still be permitted to discipline an employee for impairment or marijuana use in the workplace. The testing preclusion would not apply where testing is required by state or federal law, a contract or grant for financial assistance between the employer and the federal government and/or a valid collective bargaining agreement.

Read more

Weed and the Workplace: Recent Developments in New York, Virginia, and Colorado

New York has become the 15th state to legalize recreational marijuana use. Through Senate Bill 854A, adults aged 21 or older may possess and consume marijuana recreationally. The law also expands the list of conditions qualifying as eligible for medical marijuana use. Employees can still maintain policies prohibiting the use of marijuana while on duty, but the state has expanded employee protections for off-duty use. Virginia recently passed a bill legalizing recreational use of marijuana, effective July 1, 2021. In addition, the state’s new law also adds in employment protections for medicinal cannabis users. Expanding liability under federal law also should be in the forefront for those in the marijuana industry, following the opinion of the Tenth Circuit in the District of Colorado, which ruled individuals who work for companies in the marijuana industry can pursue Fair Labor Standards Act (FLSA) claims.

Read more

Virginia Enacts Employment Protections for Medical Use of Cannabis Oil

New protections for employees related to the medicinal use of cannabis oil have been signed into law. Effective July 1, 2021, the law will prohibit employers from disciplining, discharging or discriminating against an employee for his or her lawful use of cannabis oil so long as the use is pursuant to a valid written certification issued by a health care practitioner for the treatment of the employee’s diagnosed condition or disease. The new law only applies to cannabis oil and is written broadly enough to prohibit any form of discipline, discharge or discrimination. In addition, effective July 1, 2021, individuals older than 21 can legally possess up to an ounce of marijuana and grow up to four plants for personal use.

Read more

New York Amends Its Off-Duty Conduct Law to Account for Marijuana Use

As a result of the recent passage of “The Marijuana Regulation and Taxation Act”, New York’s off-duty conduct law now explicitly applies to an employee’s off-duty use of cannabis. The law prohibits employers from discriminating against employees for engaging in certain lawful off-duty activities where those activities occur outside of working hours, off the employer’s premises, and without the use of the employer’s equipment or property. Exceptions apply and the employer can still refuse to hire or could terminate the individual on account of these otherwise lawful activities. The prohibition against discrimination because of an individual’s legal use of consumable products or for an individual’s legal recreational activities now explicitly include “cannabis in accordance with state law,” but the new law also adds a new provision to the “exceptions” provision.

Read more

The Trend Towards Legal Recreational Cannabis: Considerations for Employers

Virginia, New Mexico, New York and New Jersey all have passed laws legalizing or decriminalizing, in some form, recreational marijuana since the start of 2021. New Mexico has legalized recreational use and sales for people over age 21. New York’s law allows individuals who are at least 21 years old to possess, use and transfer (without compensation) limited amounts of cannabis. New Jersey has legalized the sale, use and possession of recreational marijuana for individuals 21 and older. Virginia’s new law legalizes home cultivation and personal possession of cannabis, beginning July 21, 2021, and retail sales to individuals 21 and older beginning January 1, 2024. Requirements for employers under each of the laws could be difficult to meet.

Read more


Dos and Don’ts of Using Biometric Data in the Workplace

Many organizations use employees’ “biometric data,” but it does not come without risk. Violations of biometric data privacy can be costly, with some states enacting laws that create a private right to file civil action for biometric data privacy violations. The Illinois Biometric Information Privacy Act (BIPA) is one of them, permitting statutory damages of up to $1,000 per negligent violation and $5,000 per reckless or intentional violation. More than 400 BIPA class actions have been filed in the state over the last two years. In addition, those who refuse to submit biometric data may also be entitled to compensatory damages for back pay, front pay and emotional distress. To minimize risk, employers should disseminate a written privacy policy regarding its biometric data collection process; obtain written consents before data is collected; provide employees written notice; consider potential racial bias claims; implement appropriate confidentiality, storage and data security measures; and negotiate indemnification agreements.

Read more

U.S. Biometric Laws & Pending Legislation Tracker Link

The increase in biometric privacy laws have led to an increase in class action litigation against employers, so it is important for businesses to remain informed of their obligations to avoid monetary exposure. Existing laws vary by state. A few examples include Arkansas’ Personal Information Protection Act (PIPA), which requires businesses to take all reasonable steps to destroy or arrange for the destruction of a customer’s records containing personal information and implementation and maintenance of reasonable security procedures and practices, and the California Consumer Privacy Act (CCPA), which includes an obligation to make certain disclosures regarding collection of biometric data. A complete list of states and their respective biometric privacy laws can be found here.

Read more

Maryland Joins Growing Number of States Introducing Biometric Information Privacy Bills with Potential to Spur Class Action Litigation

Maryland recently introduced a standalone biometric information privacy bill. House Bill 218 mirrors Illinois Biometric Information Privacy Act (BIPA), providing for a private right of action, statutory penalties and plaintiffs’ attorneys’ fees. Employers should take note and monitor developments to avoid class action lawsuits. The Commercial Law – Consumer Protection – Biometric Identifiers and Biometric information Privacy prohibits private entities from capturing, collecting, or storing a person’s biometrics without first implementing a policy and obtaining written consent, implements standards of care for the handling of biometrics, and prohibits disclosure of biometrics without consent.

Read more