Criminal activity refers to any behavior that violates local, state, or federal laws, including actions such as theft, fraud, assault, property damage, and other offenses punishable by the criminal justice system. These unlawful acts can range from minor misdemeanors to serious felonies and are investigated by law‑enforcement agencies to protect public safety and uphold legal standards. Understanding criminal activity is essential for risk assessment, background checks, security planning, and community safety initiatives, as it highlights patterns of unlawful behavior and potential threats.

The FCRA Big Three Lawsuit Triggers

Hiring the right talent is critical but one overlooked detail in your background screening process can cost your company millions. Employers often assume background checks are routine, yet the legal landscape tells a different story. The majority of lawsuits tied to employment screening aren’t about discrimination or bad hires—they’re about technical compliance mistakes under the Fair Credit Reporting Act (FCRA). These errors are easy to make and expensive to fix.

Research shows that approximately 73% of FCRA-related lawsuits against employers stem from these three common mistakes:

  • Non-compliant disclosure forms
  • Missing or delayed pre-adverse action notices
  • Inadequate authorization forms

The consequences can be significant: statutory damages of $100–$1,000 per violation, plus attorney fees, with settlements often reaching mid-six to seven figures.

Emerging Risk: Disparate Impact Discrimination

Background check policies and particularly those applying strict pass/fail criteria based on criminal history can unintentionally violate Title VII if they disproportionately impact protected groups. The EEOC has successfully challenged such blanket policies in litigation.

EEOC guidance emphasizes individualized assessments, considering:

  • The nature of the offense
  • Time elapsed since the offense
  • Relevance to the job

Relying on generalized exclusions without job-specific review creates legal risk. Additionally, many state and local laws impose specific requirements for individualized assessments.

Best Practices to Reduce Lawsuit Risk

To minimize exposure from background screening:

  • Use standalone, plain-language disclosure forms before any check.
  • Obtain written authorization in a separate form, not embedded in applications.
  • Follow the adverse action protocol: provide a pre-adverse notice with a copy of the report and summary of rights, and wait at least five business days before issuing the final notice.
  • Allow candidates to dispute findings.
  • Implement individualized assessments, especially for criminal record policies.
  • Regularly audit processes and train HR staff on evolving regulations.

 

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

December 23rd, 2025|Categories: Compliance Corner for Employment Decisions|Tags: , , |

The Illusion of Instant Criminal Checks: Why a True National Criminal Database Still Doesn’t Exist

If you’ve ever been pitched a “national criminal database,” you’ve probably imagined a single, authoritative system that instantly returns every criminal record across the United States. That database doesn’t exist for non‑law‑enforcement users and relying on anything marketed that way can lead to missed records, inaccurate matches, and regulatory headaches.

What actually exists at the national level?

The FBI operates several national systems—NCIC, III, NGI, N‑DEx, and NICS—to support criminal justice operations. These are law‑enforcement systems, with access tightly constrained by federal law and regulation (including 28 C.F.R. § 20.33). Employers generally cannot query NCIC/III directly unless a statute authorizes fingerprint‑based checks for specific roles (e.g., child care, elder care, or other regulated positions) and the check is routed through the state repository per the Compact Council rules.

Even within law enforcement, these systems are indexes and exchanges that depend on state and local repositories to submit arrests and dispositions; coverage and timeliness vary. The DOJ/BJS surveys and FBI guidance repeatedly emphasize gaps and the critical need to report final court dispositions to keep records accurate.

So what are “national criminal databases” sold by private vendors?

Commercial “national” or multi‑jurisdictional files aggregate data from many sources (state repositories where available, departments of corrections, sex offender registries, selected county uploads, watchlists, etc.). They can be useful as a pointer or discovery tool, but they are not comprehensive and often not current enough to stand alone. Coverage varies by jurisdiction and update cadence; name‑match noise creates false positives/negatives, especially with common names.

Industry resources and compliance guidance are consistent on this point: use multi‑jurisdictional databases to broaden the net, then verify at the originating court or repository before reporting or taking action.

Why “database‑only” screening creates risk

  1. Incomplete coverage: Not all courts or states report; updates lag. Recent charges or local misdemeanors may be absent.
  2. Identity ambiguity: Limited identifiers can mis‑match results; aliases and data entry errors compound the problem.
  3. Stale or missing dispositions: Arrests without case outcomes mislead; expungements or dismissals may remain in bulk feeds.
  4. Fair Credit Reporting Act (FCRA) compliance exposure: The FCRA requires “reasonable procedures to assure maximum possible accuracy” and complete, up‑to‑date public record reporting. Database “hits” must be confirmed at the source, and consumers must be notified appropriately when adverse public records are reported for employment decisions.

Regulators have sharpened expectations. In 2024, the Consumer Financial Protection Bureau (CFPB) reiterated that consumer reporting agencies (CRAs) must prevent reporting of duplicate or expunged/sealed items and include disposition information where available. CRAs also must disclose the source(s), both original and any intermediaries, when consumers request their files.

Why this still matters

Despite modernization, data gaps persist—especially in disposition reporting and identity matching. The newest BJS/SEARCH survey shows continued dependence on state repositories and varying automation/completeness across states, reinforcing why source verification and robust procedures remain critical.

Meanwhile, regulators (CFPB/FTC) are raising the bar on “maximum possible accuracy.” Organizations that rely on “instant database” products without verification risk adverse action mistakes, consumer disputes, and enforcement exposure.

 

Disclaimer: This communication is for general informational purposes only and does not constitute legal advice. The summary provided in this alert does not, and cannot, cover in detail what employers need to know about the amendments to the Philadelphia Fair Chance Law or how to incorporate its requirements into their hiring process. No recipient should act or refrain from acting based on any information provided here without advice from a qualified attorney licensed in the applicable jurisdiction.

December 12th, 2025|Categories: Compliance Corner for Employment Decisions|Tags: , , |

Arrest record but no charges

Typically, an arrest record will show the date, arresting agency, and the subject’s name (and other identifiers such as DOB and address), without specifying the charge or charges. The reason for this is twofold: (1) until the district attorney (“DA”) files a criminal case, there are no charges; and (2) the charges filed by the DA may be different than the charges on which the arresting officer based the arrest. An “arrest” and “being charged with a crime” are different things (although obviously related).  An “arrest” means that a person is taken into custody because they have been accused either by a warrant or by probable cause of committing a crime. Once in custody, the prosecutor’s office will decide whether the person will be charged with a crime. The person will then be given a charging document (complaint or information) that will state what charges they are facing.

A record will never show that an arrest was “dropped.” At best, you can infer that no charges were filed after an arrest if there is no corresponding court case.

December 15th, 2021|Categories: Compliance Corner for Employment Decisions|Tags: |

New Jersey Crime Categories

As explained in our previous posts, the most serious offenses are categorized as “felonies” and less serious as “misdemeanors.”  While this is true in nearly every state, there is an exception (of course) and that exception is New Jersey.

In New Jersey, crimes are not categorized as felonies and misdemeanors but as “indictable crimes,” “disorderly person offenses,” and “petty disorderly person offenses.”

According to New Jersey law, indictable offenses are the equivalent of felonies in other states. Courts classify charges into first, second, third, and fourth-degree charges. A first-degree offense is the most serious of all charges. “Indictable” means that a grand jury has found enough evidence against the defendant to make them face trial.

“Disorderly person offenses” and “petty disorderly person offenses” (sometimes referred to as “DP offenses”) are the equivalent of misdemeanors in other states because they are less serious offenses and are punishable by less than one year in jail.

November 29th, 2021|Categories: Compliance Corner for Employment Decisions|Tags: , |

California’s marijuana laws present challenges for employers

Even for those not partaking in marijuana, the various California laws regulating its use can be confusing – particularly for employers.

The trend in state legislatures to permit the recreational and/or medicinal use of marijuana began with California’s Compassionate Use Act in 1996, which allowed state residents to use the drug for medical purposes and decriminalized possession of less than 28 grams. Complicating the matter, however: marijuana use remains prohibited by federal law.

With limited use of marijuana legal in the state, how can employers find out about a worker’s use of the drug or limit it without running afoul of state law?

Employers have two options, either try to get their hands on historical information, such as criminal convictions, or seek out current input via drug testing.

Criminal history related to drugs in many instances is off-limits for employers. Job applicants cannot be required to disclose an arrest that did not result in a conviction or participation in a pretrial or post-trial diversion program. Any criminal history that has been expunged, sealed, or dismissed will be unavailable as are marijuana-related convictions dating back more than two years.

While California has not banned the box for private employers, local jurisdictions such as San Francisco have, requiring employers to wait until after a live interview or determining that an applicant meets the qualifications for the position before inquiring into criminal history. Background checks – whether performed in-house or by a third party – require compliance with federal law (the Fair Credit and Reporting Act (FCRA) as well as California’s counterpart, the Investigative Consumer Reporting Agencies Act (although the legality of the state statute is unclear, see story below for more detail). And such investigations into applicants’ history are a current target for the Equal Employment Opportunity Commission – which has filed multiple lawsuits (https://www.scherzer.com/eeoc-loses-again-in-challenge-to-background-checks/) against employers alleging their background checks constitute disparate impact discrimination against protected groups like African-Americans – and a popular basis for class actions. Recent cases have settled with multi-million awards, including a $2.5 million payout by Domino’s Pizza and a $6.8 million deal between Publix Super Markets and a class of applicants alleging the company violated the FCRA.

Drug tests can be viable option for employers. Once a job offer has been made, an employer may require an applicant to pass a drug test as a condition of employment (as long as all potential employees are subject to the same requirement). After a worker has been hired, drug tests may be used if an employer has a reasonable suspicion that the employee is under the influence. Certain jobs – such as those in the transportation industry like truck drivers – may permit such testing more freely. If a test comes back positive, employers do have the discretion to discipline, terminate, or choose not to hire an applicant even if the individual legally holds a medical marijuana card issued by the state. In addition, despite the requirements under the Americans With Disabilities Act and California state law to provide reasonable accommodations to employees considered disabled, neither federal nor state law requires employers to permit marijuana use as such an accommodation.

September 23rd, 2015|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

San Francisco enacts ordinance for using criminal records in employment decisions

Effective August 13, 2014, under San Francisco’s Fair Chance Ordinance, companies with 20 or more employees are prohibited from inquiring about an applicant’s criminal history on the employment application or during the first live interview. Along with banning the box, the ordinance imposes several additional restrictions and mandates certain considerations for individualized assessment. San Francisco employers must also ensure that their notice and consent forms for criminal background inquiries later in the process comply with the guidelines that will be published by San Francisco’s Office of Labor Standards Enforcement (OLSE) as well as with the already existing background check disclosure/authorization requirements under California’s ICRAA and the FCRA.

San Francisco is the ninth jurisdiction with legislation that affects private employers. The remaining eight are the states of Hawaii, Massachusetts, Minnesota, Rhode Island, and the cities of Buffalo, NY, Newark, NJ, Philadelphia, PA, and Seattle, WA. Multi-state employers should consider whether their particular circumstances warrant adopting individualized employment applications for jurisdictions with ban-the-box laws, or whether to use a nationwide standard form. Employers who opt for a standard electronic application for all locations need to include a clear and unambiguous disclaimer for applicants in each applicable ban-the-box jurisdiction. It is uncertain whether such disclaimers are sufficient for paper applications of multi-state employers in at least one ban-the-box jurisdiction (Minnesota) or if the box must be removed altogether.

For more information on ban-the-box legislation, see the recently published briefing paper by the National Employment Law Project titled Statewide Ban the Box – Reducing Unfair Barriers to Employment of People with Criminal Records.

Note: Effective August 13, 2014, with our California employment-purpose disclosure/ authorization form, we will be including a supplemental disclosure/authorization notice as prescribed by the OLSE, to use by San Francisco employers. 

March 28th, 2014|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

Justice Department collected more than $8 billion in civil and criminal cases in 2013

 

Attorney General Eric Holder announced on January 9, 2014 that the Justice Department collected at least $8 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2013. The statistics indicate that in FY 2013, approximately $5.9 billion was collected by the department’s litigating divisions and the U.S. Attorneys’ offices in individually and jointly handled civil actions. The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered money lost to fraud or other misconduct and collected fines imposed on individuals and/or corporations for violations of federal health, safety, civil rights or environmental laws.

January 23rd, 2014|Categories: Commercial Transactions Due Diligence|Tags: , |

New law prohibits North Carolina employers from asking about expunged records

Effective December 1, 2013, employers in North Carolina will not be able to ask job applicants about arrests, criminal charges, or convictions that have been expunge SB 91 prohibits inquiries into expunged matters both on applications and during interviews, and was enacted to clear the public record of any arrest, criminal charge, or conviction that was expunged so that the subject is legally entitled to withhold all information about it from potential employers and others. Notably, employers will still be allowed to ask about arrests, criminal charges, or convictions that have not been expunged and can be found in public records.

October 29th, 2013|Categories: Compliance Corner for Employment Decisions|Tags: , , , |

FINRA issues investor alert about calls from brokerage firm imposters

The Financial Industry Regulatory Authority (“FINRA”) issued a new alert on August 6, 2013 labeled as Cold Calls from Brokerage Firm Imposters—Beware of Old-Fashioned Phishing to warn investors of calls from scammers claiming to be representatives of at least one well-known brokerage firm. In this latest twist on phishing scams, the fraudsters are cold-calling investors claiming to offer information about certificates of deposit with yields well above the best rates in the market in an attempt to get potential victims to divulge their personal or financial account information.

FINRA is reminding investors who receive unsolicited calls to never provide personal information or authorize any transfer of funds to any unknown person, and encourages anyone who believes that he/she has been scammed to file a complaint using its online Complaint Center or send a tip to FINRA’s Office of the Whistleblower.

August 7th, 2013|Categories: Commercial Transactions Due Diligence|Tags: , , |

Disciplinary action serves as reminder of due diligence requirement in Reg. D offerings

A recent disciplinary action reaffirmed FINRA member firms’ obligations to conduct a reasonable investigation of the issuer and the securities it recommends in offerings made under the SEC’s Regulation D, commonly known as private placements. Regulation D provides exemptions from the registration requirements of Section 5 under the Securities & Exchange Act, but it does not exempt these transactions from the antifraud provisions of the federal securities laws. A broker-dealer thus has a duty—enforceable under federal securities laws and FINRA rules—to conduct a reasonable investigation of the securities it recommends. Moreover, any broker-dealer that recommends securities offered under Regulation D must meet the suitability requirements under NASD Rule 2310, and comply with the advertising and supervisory rules of FINRA and the SEC.

A broker-dealer’s reasonable investigation must be tailored to each Regulation D offering, as its scope will depend on factors such as the sophistication of the investors, the broker-dealer’s affiliation with the issuer, and other facts and circumstances of the offering. The investigation, at a minimum, should include background checks of the issuer and its management, the business prospects of the issuer, the assets held or to be acquired by the issuer, the claims being made, and the intended use of the proceeds.

A firm that engages in Regulation D offerings also must have supervisory procedures under NASD Rule 3010 that are designed to ensure that its personnel and representatives conduct an inquiry that is sufficient to comply with the legal and regulatory requirements; that they perform the suitability analysis required by NASD Rule 2310; that they qualify the investors’ eligibility to purchase the securities; and that they abide by the antifraud provisions of the federal securities laws and FINRA rules regarding the preparation and distribution of offering documents or sales literature. And a broker-dealer has a further duty to adequately investigate any information located during the investigation that may be considered a “red flag.”

August 7th, 2013|Categories: Commercial Transactions Due Diligence|Tags: , , |
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