The seven-year rule is standard in human resources as part of most background check screening processes. It’s also been a rule that most HR leaders are familiar with in that it has been part of the hiring and screening process for most HR leaders and employers for nearly 20 years. With regards to background checks, human resource professionals commonly use what are called “look-back” periods, or lengths of time to consider a conviction, civil judgment, arrest records, and paid tax liens relevant. For criminal background checks, these periods are calculated from the date of the conviction or, if the applicant was incarcerated, from the date that he or she was released from incarceration or on parole.
Recent amendments to the Fair Credit Reporting Act (FCRA) have significantly increased the rights of applicants and employees, specifically with regards to the seven-year rule. Therefore, employers must ensure compliance with the detailed requirements of the FCRA, particularly around background screening and authorization.
Essentially, the seven-year rule states that all civil suits, civil judgments, arrest records, and paid tax liens can’t be reported in a background investigation (or other consumer report) after seven years. The recent decision relates to the date on which the seven-year limit begins.
In May, Reuters reported that the FCRA’s seven-year limit for criminal charges that can be listed on a report starts running when the charges are filed, not when they are dismissed – and the dismissal does not constitute a new “adverse event” that rewinds the seven-year clock. The 9th U.S. Circuit Court of Appeals ruled that the measuring period for a criminal charge runs from the date of entry rather than the date of disposition under the FCRA.
A little background: The 9th U.S. Circuit Court of Appeals revived a FCRA lawsuit filed by a California man, Gabriel Moran, who was turned down for rental housing in 2010 after a background check by the Screening Pros of Los Angeles revealed a 2006 misdemeanor conviction and three other criminal charges against him.
Specifically, the court was deciding whether the seven-year period ran from the entry date of the plaintiff’s criminal misdemeanor charge, or from the date that charge was dismissed four years later. This interpretation of the reporting rules is consumer-friendly in that it narrows the reporting window and gives specific guidelines of how to treat a non-conviction criminal charge that was ultimately dismissed.
The plaintiff sued The Screening Pros, which provides tenant screening reports to property owners, for issuing a background check report in 2010 that contained his criminal history—including a misdemeanor charge in 2000 which was dismissed in 2004—in violation of the FCRA and the California Investigative Consumer Reporting Agencies Act. A district court dismissed the claim that the screening company violated the FCRA’s seven-year rule, finding that the reporting period for criminal charges began on the 2004 date of dismissal, not the date of entry.
The Ninth Circuit disagreed, holding that the reporting period for criminal cases begin on the date charges were filed. The court went further and held that the dismissal of a charge does not constitute an adverse item and may not be reported after the reporting window for the charge has ended.
Given this new decision, employers, and consumer reporting agencies should evaluate their reporting procedures and processes, especially as it relates to non-conviction records. While the Ninth’s Circuit reasoning was supported in the earlier amicus briefs filed by the Federal Trade Commission and the Consumer Financial Protection Bureau, there is at least for the time being a definitive statement on what can be reported. Employers should also be aware that given this new opinion, they may not receive non-conviction information on consumer reports where a charge was entered more than seven years from the date of the report.
The FCRA prohibits background screening firms from reporting any arrest record or adverse non-conviction information older than seven years. The 9th Circuit includes Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington. Under the Ninth Circuit’s interpretation, employers should also know that background checks shouldn’t include later events such as dismissals, even if they are within the seven-year window.
Some Consumer Reporting Agencies (CRAs) offer inexpensive “criminal background checks” based solely on database searches. It is never a good practice to rely on reports based solely on these searches. While they contain useful information, databases are not current and accurate, principally because they are not updated regularly and may not contain all relevant records. Any reliable report must search the records available from the courts in the county and/or state where the candidate resided. Additionally, if federal crimes are considered relevant for the position, the appropriate U.S. District courts should be searched – in this case, the 9th Circuit’s specificity on when the clock starts ticking for the seven-year rule.
Enlisting the services of a background check service provider means that your company can rely on the expertise of an experienced team that specializes in keeping up with current legal matters related to compliance for background screening on the federal and state level. Cisive ensures FCRA, state, and local Ban the Box notification, time-frame, and record-keeping compliance; maintains auditable logs; and streamlines your candidate experience through online notification and data collection.
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