What Fast-Track Employment Screeners Won’t tell you About Paperless Employment Screening
by Thomas C. Lawson, CFE, CII
background-check platforms are web-based and the amount of interactivity
required by the end user during the screening process can vary significantly
Higher-standard employment screening firms opt to process the work in the
middle. You enter the information at the beginning and then log on to
retrieve the completed report typically prompted by an e-mail or text.
The recent movement in the screening industry to eliminate paper entirely in
the screening industry is dangerous to the end-user and to the consumers
upon whom the background checks are being run.
The paperless push requires the applicant to electronically sign (eSign) all
background check consent forms online to integrate the consent and screening
process into one of the many web-based applicant -tracking systems (ATS)
available to the HR community.
The perceived benefit to human resource departments is the savings in labor
costs for large, high-volume hiring environments as well as the ability to
outsource more HR functions.
In reality, the labor savings and efficiencies are significantly precluded
by the legal risk associated with automated processing if recent case law
and the increase in Plaintiff attorney actions against the background
screening end-users and providers, alike are any indication. Not to mention
under the letter of the law, under the FCRA, etc. anything other than a
written consent is illegal.
According to the Fair Credit Reporting Act (FCRA Sec. 604, a2) and in
California, the Investigative Consumer Reporting Agencies Act (ICRAA), as
well as the statutes that govern background checks (consumer reporting) in
most states unanimously call for consent to be based upon the “consumer’s
Nowhere does it say, “upon the consumer’s electronic authorization” or,
“consent may be conveyed via eSignature.”
They all say that a background check may only be obtained only by a
consumer’s written authorization. Under the law that means that an applicant
must sign an appropriate consent form with a “live,” “holographic,” or “wet”
The reasoning behind this is simple: When a person electronically consents,
there is no way to prove that the person upon whose signature appears
electronically is actually the person who issued the electronic consent.
The extremely weak defense under the Electronic Signatures Act of 2001, or
the eSign Act, and the Uniform Electronic Transactions Act (UETA) is that
one can attempt to prove that the Consumer intended to sign it based loosely
on the surrounding actions of applying for a job.
That means that Billy Bob could have consented to John Smith’s background
check, while Billy Bob was applying for a job under John Smith’s name as
part of Billy Bob’s identity theft strategy.
In essence, with no way to absolutely confirm that a given person consented
to a given background check, every time you accept an electronically signed
consent, you are risking that a consumer’s identity may be under threat from
an identity thief. You can’t know otherwise without comparing signatures.
There are those who argue that the eSign Act and UETA alleviate the need for
a wet signature. But in both of these laws, which were essentially developed
in an effort to stimulate internet commerce, there is a little attended-to
component that subjects the laws to other statutes which may have overriding
determinants as to the importance of live signatures versus esignatures.
What that means is that the eSign Act subordinates itself to laws like the
FCRA and the ICRAA, etc. where the superseding statute specifically
identifies the need for a given requirement, such as the FCRA’s and the
ICRAA’s call for a consumer’s “written” authorization.
In defense of these statutes, the eSign act and UETA are terrific for
contracts and transactions but not for consent. Mainly because the
requirements to use esignatures for consent purposes are designed to be
cumbersome in order to protect the consumer; as they should be when dealing
with such sensitive issues and where such a consent triggers so many
activities that if used outside the scope and context of their intended
purpose could have dire consequences to the consumer.
It is also important to understand that the requirements for even using
esignatures for contracts are rigorous and most of the requirements are so
onerous that getting a wet signature just ends up being a whole lot easier.
Evidence of this is most telling is the escrow setting where all of the
electronically signed documents that occur at the outset of a real estate
transaction are cleaned-up during the final escrow process by getting live
signatures on the documents authorizing various consents in the process of
buying the real estate and qualifying for a mortgage.
Signatures are gathered at the close of escrow mainly to eliminate the eSign
Act and UETA requirement that a consumer using electronic consent at any
time may withdraw that consent, which can prove troublesome.
Now even if your background check provider in its haste to get the latest
technology to you complies with all of the eSign Act and UETA requirements,
the law clearly states that anything other than a written authorization is
Simply put, if you rely on electronic consents to authorize your background
checks you run the risk of successful Plaintiff actions against you and the
company for violation of the written consent rule no matter how aggressively
your provider wants to assert that an electronic consent is valid. It isn’t
and the law is very clear on the subject.
Any number of Plaintiff’s attorneys out there will gladly prove that to you
and sue the employer for violation of the FCRA and ICRAA law specifically
with respect to a written signature on a background consent form.
They call that area of practice “unauthorized access” and those cases are
very common evidenced by the now famous case of 1400 Plaintiffs versus First
Student (et al.) http://www.ssrplaw.com/lawyer-attorney-1314705.html
The Consumer Attorney’s (Plaintiff’s) Bar aggressively pursues these cases
mainly because they are winners since there is no actual way to prove that a
person gave their consent to perform a background check via an electronic
Additionally, and even if electronic consents for background checks for
employment purposes were legal, the prove-up for Defendant compliance
usually favors the Plaintiff because there are so many things that can go
wrong in the esignature compliance process no matter how compliance-minded
an employment screening provider is.
The burden of proof is on the employer in this case, not the applicant, and
any good defense lawyer will tell you that when the burden of proof is on
you, the potential for defeat is exponentially greater because proof is
subjective especially when you are dealing with potentially 12 different
personalities on a jury.
You may want to re-think your paperless consent strategy and opt for the
legal method of gaining written consent to run your background checks
because the paperless process is just too legally risky.
Until legislation is introduced that supersedes the written consent
requirement under the applicable laws, it is crystal clear that the law
requires you get a consumer’s live signature in order to run a background
check no matter what the proponents of using the eSign Act and UETA assert.