ABA Banking Journal - August 2008 - (Page 51) COMPLIANCE CLINIC conditional privilege to disclose information for a proper purpose to an appropriate recipient.” However, he said, a risk is that an individual can prove that there was reckless disregard for their rights. In Illinois, for instance, an employer’s reliance on such immunity can be defeated for failing to investigate the truth of a matter. And some state laws can restrict the disclosure of specific items of information. As a result, said Alper, who works with many banks, “you don’t provide any information to anyone. ‘Was he a good employee?’ ‘I really can’t discuss it.’ That’s how it’s done these days, and there’s nothing wrong with that. However, what if the position involved is extremely critical to the bank, and the candidate looks like “the one”? Alper said it is legally possible to ask the candidate to ask a former employer for their personnel file. The file, sent directly to the bank, must be provided to the inquiring employer in such cases, under “personal records review” laws. The former employer is shielded from liability in such cases. Among Alper’s recommendations: 1. Don’t disclose qualitative information about a former employee and don’t expect to receive it. 2. Disclose only objective, factual information. 3. Be consistent in information sharing. 4. Remember, “it’s ‘off-the-record’ until you get sued.” 5. Consider exceptions if failure to disclose might endanger someone’s safety, such as an employee terminated for sexual assault who is about to be hired elsewhere. 6. Make certain your employment application asks the hard questions: “Have you ever been involuntarily terminated or asked to leave any prior employment?” an applicant’s criminal past, but they are not required by law to run fingerprint checks. In Alper’s experience the process is much more common among larger banks than smaller ones. But the criminal check is no simple matter. “You don’t want to rely on arrest records,” in making hiring decisions, warned Alper. “In some states, that is a civil rights violation.” In addition, he said, the Equal Employment Opportunity Commission will look closely at an employer’s use of arrest records and even conviction records. (The agency would be looking at disparate impact of such procedures on minorities and other protected groups.) Among Alper’s recommendations: 1. Don’t ask about or consider arrest information—arrests are not convictions— or about sealed or expunged records. 2. Any convictions used to disqualify an applicant should be job-related, i.e., something that would impact work as a teller, for instance. 3. If the bank elects to use fingerprinting, it must create and consistently hold to a specific protocol. 4. Treat the failure to disclose criminal history differently than the existence of criminal history. “If they failed to disclose their history to you,” provided the bank asked the right questions, as above, and they were hired, “you can fire them, because they lied to you,” said Alper. Polish up your compliance knowledge online! Additional ABA Regulatory Compliance Conference coverage will be posted on www.ababj.com with the Fair Credit Reporting Act is mandated if the bank employer chooses to use a consumer reporting agency to obtain a credit report on an applicant. This means that use of reports must be disclosed to applicants. In addition, there are limits, such as the ban under federal bankruptcy law against discriminating against someone who filed for bankruptcy protection. Among Alper’s recommendations: 1. Monitor the potential disparate impact of your policy. 2. Construct a thoughtful, job-related policy using objective, consistently applied criteria. In spite of this list, the lawyer added, “I think the downside outweighs the benefits.” Criminal history tools and traps As number 6 foreshadows, Alper notes that banks must choose their questions carefully. And they must use what they find through applications and other means equally carefully. Case in point are inquiries regarding any criminal history, including FBI fingerprint checks. As indicated earlier, the bank must make “reasonable inquiry” of Subscribe at www.ababj.com Credit history’s a dicey one Banks are all about credit, but Alper said he doesn’t buy many banks’ position that they can’t hire someone who can’t manage their own financial affairs because they can’t trust them to manage those of customers, or the bank itself. “Oh, come on,” scoffed Alper, “there are a lot of executives who don’t pay their debts. It’s not a good predictor of job performance.” He said credit history is a means of screening applicants that EEOC scrutinizes closely when analyzing employers for disparate impact of policies and practices. While the lawyer resists using credit history, he said it can be used, with careful controls. For example, compliance Facing up to Facebook The internet represents a tremendously powerful research tool. Nearly everyone leaves a trail of some kind. Can, and should, a bank use the net in hiring? “Yes,” said Alper, “but you may learn something that’s unlawful to consider.” He suggested that if the hiree mentioned at the beginning of this article had been involved in pressing sexual harassment charges against her employer, rather than the undefined workplace issues, the bank would be in an awkward spot if the offer was withdrawn. “You may learn information that you don’t want to know,” said Alper. Or what you learn could be wrong. In addition, “Jim Dandy” decided to do his internet check in an off-the-cuff manner. “Checking on some applicants and not others may create discrimination problems,” said Alper. Still more complications arise. “Rejecting an applicant because he or she has a controversial Facebook page or blog may be illegal under laws adopted in many states which prohibit adverse employment treatment based on the use of lawful products or engaging in lawful practices outside of work,” according to Alper. Among Alper’s recommendations: 1. Decide on an internet search policy and follow it. 2. Make certain your policy bars consideration of impermissible information. BJ ABA BANKING JOURNAL/AUGUST 2008 51 http://www.ababj.com http://www.ababj.com
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