Background Screening Company Warns About Common Adverse Action Mistakes.

Failing to adhere to proper adverse action steps is a common reason for class-action lawsuits against employers, impacting Target, Petco, and more. Firms large and small can protect themselves by working with a trusted background screening company like CredentialCheck.

While employers have the right to screen their job applicants, job candidates also have legal rights that must be respected—especially if a negative finding leads to adverse action. CredentialCheck provides its clients with both thorough job candidate screening services and compliant services to help avoid lawsuits, fines, and other penalties. Their staff stays up to date on federal, state, and local legislation and regulations regarding background checks to help employers proceed with adverse action in full compliance with the law.

One common mistake employers make conducting criminal background checks when they are not permitted, such as before making a conditional employment offer. More than 30 years and 150 cities and counties have fair hiring (“ban the box”) laws that govern when and how criminal background checks are allowed. The exact conditions vary from location to location, so having a compliance expert like CredentialCheck on call is a significant help for companies looking to avoid costly missteps.

Another common mistake employers make failing to follow the correct adverse action steps. While precise adverse action procedures vary by location, the basic regulations as governed by the Fair Credit Reporting Act are as follows:


  • Send a pre-adverse action notice informing the candidate that the results of their background check are under review. This notice should include a copy of the report and the FCRA’s “Summary of Rights.”
  • Allow the candidate five business days to respond and/or dispute the report.
  • After considering any response, the employer must send a final adverse action notice stating the decision and explain its basis—informed at least in part by the background check. This notice should also tell the candidate that they may request a free copy of the report within 60 days.


Call (888) 689-2000 to learn more about how CredentialCheck helps its clients navigate compliance. Information about their job candidate screening services is available online. Their firm is headquartered in Troy, MI, and serves employers across the United States.