Pre-Employment Credit Checks Under Heightened Scrutiny

Complying with the Fair Credit Reporting Act, Title VII and State Laws

EEOC examines credit checks as potential barrier to employment

Recording of a 90-minute CLE webinar with Q&A

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Conducted on Tuesday, December 21, 2010

Recorded event now available

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Course Materials

This CLE course will provide guidance for employment counsel on ways to minimize liability exposure when employers obtain and use credit information to make hiring decisions.


The credit history of prospective workers has become an increasingly important factor in employment decisions. When conducting credit checks on applicants, employers must balance their interest in avoiding negligent hiring claims against the legal rights of applicants.

In recent years, four states have passed laws limiting the use of credit checks in hiring decisions. Several other states and the U.S. Congress are also considering legislation on the issue. The EEOC has recently targeted the elimination of discriminatory background checks as a top priority.

Employment counsel can help employers evaluate whether the benefits of obtaining credit histories outweigh the potential liabilities associated with their use as a screening tool. Counsel should also assist employers with developing effective guidelines for screening prospective employees.

Listen as our authoritative panel of attorneys explains the current legal landscape regarding the use of pre-employment credit checks, examines the employment law risks of conducting credit checks, and offers best practices for employers to minimize liability exposure when obtaining and using credit information to make hiring decisions.



  1. Legal risks of background checks
    1. Fair Credit Reporting Act violations
    2. Title VII discrimination claims
    3. State law violations
  2. Recent legal developments
    1. Recent EEOC meeting and current enforcement focus
    2. Private litigation
  3. Best practices for employers to minimize litigation risks
    1. Weigh benefits of obtaining data versus potential legal liabilities
    2. Develop written policies on what information can be collected and used
    3. Tailor background checks to fit specific criteria for job position
    4. Enforce policies consistently and uniformly
    5. Train managers, supervisors and employees on company policy
    6. Routinely self-audit applicant pools for disparate impact
    7. Considerations when using recruiters in hiring – joint employer liability
    8. Complying with the Fair Credit Reporting Act and state law


The panel will review these and other key questions:

  • How are the EEOC, U.S. Congress and the states addressing the growing use of credit checks as an employment pre-screening measure?
  • How can businesses balance their duty to conduct due diligence background checks on applicants against their obligation to comply with federal and state laws when making employment decisions?
  • What are the best practices for employers when developing and implementing policies for using credit histories when screening applicants?


Cindy D. Hanson
Cindy D. Hanson

Kilpatrick Townsend & Stockton

Ms. Hanson focuses her practice on complex commercial litigation and class action defense. She has handled hundreds of...  |  Read More

Devata, Pamela
Pamela Q. Devata

Seyfarth Shaw

Ms. Devata specializes in all aspects of employment defense including counseling, training, and litigation. She...  |  Read More

Sarah Crawford
Sarah Crawford

Senior Counsel, Employment Discrimination Project
Lawyers' Committee for Civil Rights Under Law

She litigates cases involving discrimination in the workplace. She handles employment matters through all phases of...  |  Read More

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