Good (and Bad) Background Checks

More organizations use background checks to investigate criminal histories and to make hiring and firing decisions. It's up to CSOs to make sure this powerful but flawed weapon doesn't backfire.

But companies' reliance on credit histories, criminal backgrounds and other records to make hiring decisions has led to a smaller but more common set of risks. Identities get mixed up. Records are incomplete. Outdated information comes back to haunt job seekers. Mistakes, once made, are hard to correct; and employees may feel that their privacy has been invaded, or their civil liberties violated. The situation is made worse by a growing number of vendors relying on databases that supposedly cull information from courthouses across the nation, but that may fail to adhere to legal and professional standards. The faulty information that these checks can produce could also means that convicted felons' records come back clean.

The consequence, some say, is that more and more civil lawsuits (no one knows how many) are being quietly settled out of court over background checks gone bad. "It's not atypical," says Gorman's attorney, Harold I. Goodman of the law firm Raynes, McCarty, Binder, Ross & Mundy in Philadelphia.

Background Checks: Powerful, but Flawed?

When it comes to protecting their companies from employees who pose serious security risks, perhaps no tool in the CSO's arsenal is as powerful as the background check. CSOs, who by the very nature of their jobs are accustomed to having their own backgrounds come under intense scrutiny, may not think twice about investigating someone else's. But with this power comes a considerable burden; CSOs need to ensure that such screening is done legally, fairly and accurately, or risk disqualifying or endangering good employees.

Even in the best of circumstances, though, it would be foolish to believe that background checks alone will protect organizations against employees with bad intentions. People are "the most critical aspect of any security program," says James Mecsics, vice president of corporate security at credit bureau Equifax (which does credit checks, criminal investigations and drug testing on people it plans to hire). But, he warns, "If you hang your hat on background investigations alone, you have a false sense of security. That's terrible to say, but it's the truth."Boom TownA reference check just isn't what it used to be. Many lawsuit-shy companies have gone mum about former employees. "If I'm calling company ABC for a reference check about Joe Smith, they'll say he worked here from X date to Y date; but a lot of companies are adopting a policy not to get into information beyond basic details," says Jen Jorgensen, a Society for Human Resource Management spokeswoman. Yet what good is it to know that Joe Smith left the company on July 26 if you don't also know that he was caught stealing?