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You may not be aware of the importance of pre-adverse and adverse action letters, where they fit into your hiring cycle, and just how critical they are in protecting your firm from litigation. While the process can seem confusing and even a little daunting, avoiding it altogether is a recipe for disaster. Here are some answers to help you navigate this important step in your hiring process.

Let’s use the lens of pop culture to break down pre-adverse and adverse action letters by using the famous 1981 movie, Raiders of the Lost Ark, as an analogy. So, you’re Indiana Jones, lowering yourself into the chamber that holds the ark. Your descent represents the hiring process. You’re blanketed by darkness but, thankfully, you have a torch. When your feet touch the chamber floor, you’ve decided on the candidate; in this case, the background screen has uncovered adverse information and you’ve decided to disqualify the candidate from further consideration.

Uh oh! No sooner have you made this decision than you find yourself surrounded by lethal snakes—they’re the potential litigation facing your company should you fail to complete the pre-adverse and adverse action cycle with that candidate. But with a brilliant Indy-like move, you spread gasoline over the snakes and light it with a torch. That’s your pre-adverse and adverse action letters, neutralizing the threat and keeping you out of costly court cases—good thinking!

So why even bother spending time on a disqualified candidate?

Simply put, it’s the law. Under the federal Fair Credit Reporting Act (FCRA), employers who base their decision not to hire a candidate on any information revealed from background screens conducted by a third-party background screening service provider are required by law to send a pre-adverse letter, and possibly an adverse action letter, to the applicant or candidate.

How do I fling my torch, then?

To protect your company from viperous litigation, you first must send the applicant a pre-adverse action letter within three days of receiving the consumer report (background screen). This notifies the applicant that you uncovered a specific negative finding and that you intend to take adverse employment action (that is, not hire, terminate, not move forward with a promotion, and so forth). A copy of the consumer report with the negative result must be attached to the letter, along with a clear statement of the applicant’s rights under FCRA: That is, if the applicant believes the report to be incomplete or inaccurate, the applicant has the right to dispute the finding and provide an explanation that might be satisfactory to the employer.

And that’s it, right?

Wrong! That’s like spreading the gasoline over the litigious hissing snakes but not lighting it. According to the FCRA, a “reasonable period of time” must be afforded the applicant for responding before to respond before moving to the next step. While not defined specifically in the FCRA, as a best practice, TruView recommends between a week to 10 days. If the candidate does not dispute the negative information within this reasonable amount of time, the employer is required to send an adverse action letter. For more detailed information on what is included in pre-adverse and adverse letters, check out this article from TruView President Nick Auletta.

What happens if I don’t send the letters?

Have you already forgotten about the den of snakes? Do you enjoy being bitten by them? While sending pre-adverse and adverse action letters may seem like unnecessary steps to some hiring managers, the letters provide evidence of compliance with the FCRA, which will prove helpful should a rejected candidate pursue the matter in court. A tighter labor market has increased the risk of rejected job candidates filing lawsuits against employers. The cost of litigating these lawsuits plus the potential penalties levied should the court rule in favor of the candidate could be enough to do serious harm to your business.

What can TruView do to help?

Just like Indy had his trusty sidekick Sallah, so do you have a trusted partner in TruView. Our TRU365 platform has automated the Pre-Adverse and Adverse Action delivery process through electronic notices. Clients have the ability to use TruView’s best practices pre-adverse or adverse action notices, upon approval, or upload their own forms to TruView’s platform. Further, to ensure security and compliance, the electronic notice requires the applicant to confirm receipt and captures the IP address and date-and-time stamp when read.

The hiring process can be fraught with peril yet having a steadfast guide and subject matter expert to help lead you in the right direction means all the difference. Contact TruView today and see how we can assist you in avoiding the snakes and finding what you are looking for: the perfect candidate for your needs.