Employment Screening Resources (ESR) Newsletter and Legal Update
1. New Federal Case Limits Use of Personality Tests in Hiring
1. New Federal Case Limits Use of Personality Tests in Hiring
The Seventh Circuit Court of Appeals recently held that the use of a pre-employment psychological test that measures mental disorders is a violation of the Americans with Disabilities Act (ADA). The case involved a claim by plaintiffs who were denied promotion in a rental store chain after being administered tests that included the well-known Minnesota Multiphasic Personality Inventory (MMPI) test. According to the Court, that test measures traits such as depression, paranoia and mania, which can be used in diagnoses of certain psychiatric disorders. The test included questions such as:
“I see things or animals or people around me that others do not see.”
“I commonly hear voices without knowing where they are coming from.”
“At times I have fits of laughing and crying that I cannot control.”
“My soul sometimes leaves my body.”
“At one or more times in my life I felt that someone was making me do things by hypnotizing me.”
“I have a habit of counting things that are not important such as bulbs on electric signs, and so forth.”
The ADA generally prohibits unfair discrimination based upon the use of medical tests that are used pre-employment, or are not job-related and consistent with business necessity.
The employer argued the test was not a medical test since it was used only for vocational purposes related to employment decisions, and was not used to screen out applicants for clinical depression or other disorders. Nor was the test scored by a psychologist. Even though the plaintiffs were current employees seeking promotion, the employer did not argue that this test was job-related and consistent with business necessity, but rather sought a ruling that the test was not a medical test at all.
The Court disagreed. Drawing from EEOC guidelines, the Court ruled that the test violated the ADA because it could potentially be used to diagnose mental disorder, resulting in applicants being disqualified from jobs, pre-employment, based upon a medical test.
The bottom line for employers: There is no question that pre-employment tests can be extremely valuable when used correctly. However, employers need to exercise caution when utilizing personality tests on job applicants. Even though this case concerned just one test in particular, it could have implications on other tests as well. Employers need to make sure that any test administered does not violate the ADA limits on pre-employment medical testing.
ESR clients, Employers and HR and Security consultants may obtain a copy of the case by contacting Jared Callahan via email at jcallahan@ESRcheck.com or calling 415-898-0044 ext. 240.
2. Hospitals Face New Standards Effective January 1, 2006 for Verification of Professional Licenses
Effective January 1, 2006, the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) will require that hospitals and covered health care entities conduct Primary Source Verifications (PSV) on all licensed, registered or certified staff. The rule applies to both employees and contract staff, and also applies to the process of tracking license renewals as well. The new standard is contained in HR.1.20.
For hospitals and covered health care organizations, there is a logistical challenge in obtaining, tracking, updating and maintaining an audit trail for all employees who are required to be licensed, registered or certified. Licenses are typically checked when an employee is first hired, but covered entities must now verify the information from the primary source, track expiration and manage the process of updating records from the primary source in order to be in compliance.
To help hospitals and covered entities comply, ESR has created a special online service for its clients called the ESR PSVcheck Service. The online service manages and tracks the entire process in accordance with the new standards. For example, the online system generates automatic reports on all employees and contractors with licenses that are expiring in a specified time period. The ESR PSVcheck Service provides tools to conduct license verification for the primary source and to track all current and past licensees. Each department in the hospital can determine if it wants to conduct the Primary Source Verification itself, or outsource that task to ESR. During a JCAHO audit, all necessary information demonstrating compliance with the Primary Source Verification rule is instantly available using The ESR PSVcheck Service.
For more information on the ESR PSVcheck Service and how to be in compliance by January 1, 2006, contact Jared Callahan via email at jcallahan@ESRcheck.com or call 415-898-0044 ext. 240.
3. Why Employers Need to Carefully Review Background Screening Forms
An issue of increasing importance for employers is the legality of the authorization and disclosure forms signed by applicants. Not only is it critical for the forms to comply with requirements of the federal Fair Credit Reporting Act (FCRA), but there can also be state specific rules.
One example of specific state rules is California. In 2002, California passed a law that was later substantially amended that same year which created a number of very specific requirements for legally compliant forms. ESR participated in drafting language in the amended bill in 2002 and also testified in front of the California legislature.
Some of the special California rules are:
- The front page of any screening report requires specific statutory language.
- The Disclosure form that must be provided to applicant has a number of â€œonly in Californiaâ€ requirements.
- A certification letter that an employer must provide to a screening firm.
It is especially critical for employers who hire in California to pay close attention to these requirements. That is because any failure by a background screening firm or Employer to follow these laws can result in substantial civil exposure.
California Civil Code section 1786.50 states:
(a) An investigative consumer reporting agency or user of information that fails to comply with any requirement under this title with respect to an investigative consumer report is liable to the consumer who is the subject of the report in an amount equal to the sum of all the following:
(1) Any actual damages sustained by the consumer as a result of the failure or, except in the case of class actions, ten thousand dollars ($10,000), whichever sum is greater.
(2) In the case of any successful action to enforce any liability under this chapter, the costs of the action together with reasonable attorney’s fees as determined by the court.
(b) If the court determines that the violation was grossly negligent or willful, the court may, in addition, assess, and the consumer may recover, punitive damages.