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View Diary: Pre-Employment credit checks, and unemployment discrimination. (111 comments)

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  •  Happened to me. After health problems caused (2+ / 0-)

    me to default and could not go bankrupt I was never able to get a job though for many years tried.

    Since I have a degree and good character and experience I believe this is the reason why.

    "extreme concentration of income is incompatible with real democracy.... the truth is that the whole nature of our society is at stake." Paul Krugman

    by Gorette on Thu Dec 06, 2012 at 07:33:04 AM PST

    •  That really doesn't sound right (1+ / 0-)
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      I personally got into law for good reasons. Things like that that keep me curious.

      I saw this diary and posts like this and wondered a bit. If it were more recent I'd look more as there are no cites, but I found this through a Law Review article:

      Checking Credit WHEN IT'S DUE.  Security Management - June 1, 2000 Frederick G. Giles. I downloaded the entirety on Amazon. But this part makes me wonder what they are referring to "law wise".

      This is a tale of two job candidates. They were the best of candidates. One of them, however, was later revealed to be, if not the worst of credit risks, at least a troublesome sort. They both sought a senior accountant position. The first (we'll call him Smith) had 15 years of accounting experience. He was also a graduate of Harvard and was the past president of a gional accounting trade association. The second (whom we'll call Jones) was a graduate of a small college in the Midwest who had been a practicing accountant for only three years. Based on preliminary interviews and paper credentials, the company planned to hire Smith as long as nothing showed up in the routine background check. Then the preemployment investigation discovered that, although he had a mostly clean credit record, Smith had gone through a bad period in 1998 when he missed several mortgage payments and had run up high credit card bills. Since the position was one that would entail the handling of company funds, management felt that cre dit history was highly relevant. Smith's checkered financial past raised serious doubts about his suitability, so management took what it deemed to be the safest course of action--it gave the job to Jones.

      WHAT THE COMPANY DID NOT REALIZE was that Smith's missed payments came the same year that his wife was terminally ill with cancer. The family's medical bills had mounted so high that it was unable to meet some of its other financial obligations. The credit report had not explained why these payments were late--it had simply provided the raw data. Had this been a real case, the company's "safest course" could have landed it in court facing litigation if Smith had decided to take legal action against it.

      . . .  companies are often ignorant of the limitations on their use. The result is that hiring practices may be creating potentially costly problems down the road.

      Various court cases, federal law, and Federal Trade Commission (FTC) opinions have established a series of precedents that govern when a credit report can and cannot be used to deny someone employment. While companies need to consult legal counsel about their own circumstances, in general, it is best if a company does not use credit reports to determine whether a job candidate should be hired. In cases where it is clear that these reports provide an indispensable window on a person's potential honesty and integrity, credit histories should be viewed only as the first step in a broader investigation that identifies the reasons why someone might have bad credit.

      I don't know what those FTC, laws, and precedents are, but I find it problematic (or would) if someone came to my office who was in sales for 20 years, graduated from Stern Biz school at NYU, and was denied a job they were assured because 5 years ago they were on the verge of bankruptcy due to medical bills.

      Now take away the connection to money management, I would really wonder even if it was an extension of law as it is against public policy (how you carved out exceptions to employment at will) it would see to not hire individuals for handling funds a certain way when faced with, death?

      I am sure regardless of legislature this will be pushed. There are so many issues (not to mention the FCRA is not an employment act).

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