Be careful where you dig

Drug tests and background checks present some legal hurdles


Pre-employment screening, in the form of medical tests, drug tests and background checks, often provides valuable information to help employers find the right matches for their available positions while minimizing costs associated with high turnover and claims for negligence in hiring. But as helpful as such screening practices may be, the information collected is heavily regulated by federal, state and local laws, which may create legal pitfalls for you. We will explore the proper procedures to avoid such risks from a federal law compliance perspective. Some local laws and state laws may differ from federal law requirements; be sure to check your local and state laws to ensure compliance.

Pre-employment tests

Pre-employment medical tests and drug tests are regulated so as not to provide employers with unnecessary information about conditions that may be disabilities and to limit intrusions on applicants' privacy rights. The Americans with Disabilities Act (ADA), along with many state fair employment and/or human rights laws, regulate the manner in which and extent to which such tests may be administered to ensure a workplace free of disability discrimination.

Before employment begins, you may ask all individuals applying for a particular position about their abilities to perform certain job functions with or without reasonable accommodation. You also may require pre-employment medical or psychological tests if the following requirements are met:

  • The purpose of the test is to screen out applicants who are unable to perform a particular job safely with or without reasonable accommodation

  • The test is administered after a conditional job offer is made

  • The test is administered on the same terms to all applicants who are offered a particular position

  • Any medical information gathered is maintained separately and confidentially

  • The test does not provide information about nonjob-related conditions and does not screen out individuals with conditions that could be reasonably accommodated

  • The test results are available to the applicant upon request

If an applicant is not hired because of the results of such an exam or inquiry, you must be able to show the reasons for not hiring the applicant are job-related and necessary for the applicant to do the job and you to conduct business and there was no reasonable accommodation that would have allowed the applicant to perform the essential functions of the job in question.

Results of all medical examinations and information about a disability must be confidential and maintained in separate medical files. Furthermore, all test results and related documentation must be maintained for a period of at least one year from the date the relevant personnel decision is made or, if the individual was hired, one year from the employee's termination date.

The bottom line is medical tests can be used if strictly relevant to a job, uniformly administered and applied, and properly handled confidentially.

It is important to note ADA's protections do not extend to current users of illegal drugs and alcohol (other than alcoholics in some circumstances), and drug tests are not considered to be medical examinations under ADA. This means you can screen applicants with a drug test at any time before hire and before a conditional job offer is made. (Because alcohol use is not unlawful, to prevent privacy claims, tests for alcohol use should not be conducted before employment.)

Although you have a freer hand in the drug test area, some uniform controls should be put into place. Because of privacy concerns, before instituting drug tests, you should do the following:

  • Establish the types of tests that will be used, compliant with any state law restrictions

  • Prepare and post a comprehensive written policy regarding illegal drug and alcohol use that complies with applicable law and describes testing procedures, as well as the consequences of a positive test result

  • Provide written notice to applicants and require a signed consent form

  • Use a certified, reputable laboratory to conduct the testing

  • Use initial and confirmatory tests

  • Use an audited chain of custody procedure that attests to the integrity of the sample and test results at every stage of the proceeding

  • Provide applicants the opportunity to explain in advance any testing issues or potential causes of a false positive

These measures should address applicants and current employees and be adopted as part of an overall drug-free workplace program.

As with medical testing, drug testing results should be documented and kept confidential for at least one year from the relevant employment decision or, if a current employee, from the date of the employee's termination.

Background and references

With privacy and negligent hiring lawsuits on the rise, you are well-advised not only to ask applicants for information on an employment application but also check the information by conducting meaningful background and reference checks. If you seek information about an applicant's work history, education, criminal history, etc., do not simply take an employee's word for the information provided. Instead, conduct a background check of your own. Such checks add significance to a request for information and show you are a diligent employer who cares enough about employees and your workplace to carefully screen the individuals you invite to become employees.

First, you must understand the federal Fair Credit Reporting Act (FCRA) requires employers who use an outside third party to conduct background and reference checks to comply with specific notice, disclosure and consent requirements (see "Complying with FCRA," page 43).

You also must certify to the third party that you will not misuse the information in violation of equal employment laws and will comply with other FCRA requirements. Further, such notification steps must occur when you seek personal interviews with the applicant's friends and/or acquaintances, and additional requests may be imposed by applicable state or local laws. An employer is excused from compliance with FCRA only if he conducts the checks himself using his employees and personnel to collect the information.

All documents relating to and evidencing compliance with FCRA should be kept for at least one year from the date the record was made or, for employed individuals, the date of termination.

When conducting background checks, be cautious when checking information to ensure the information sought is legally available and can be legally considered part of an employment decision. If it is not, it should not be obtained. Under many state laws, for example, employers are barred from considering arrest information (as opposed to conviction information) and convictions that are of a certain age or contained in records that have been expunged, sealed or impounded. Similarly, you should not seek irrelevant information, such as driving record information from applicants for positions that do not require driving, or educational history checks when no particular education is required for the position. Document all background checks you conduct or commission, and include copies of any records obtained and/or requests made.

Reference checks serve much the same purpose as background checks but with arguably even more relevance because reference checks validate an applicant's self-reported personal and work history. Reference checks should be as specific as possible to provide the most useful, relevant information and limited to topics about which the employer could lawfully ask the applicant. All references listed should be checked.

As reference checks are performed, record the following information: name/title of person who contacted references; list of references contacted (including those who were not contacted and why); name and position of persons contacted; notes of the conversation, including a list of information collected (which should be the same for all applicants); and copies of any documents received. Such notes and documents should be kept for one year after the employment decision or for one year after an employee's termination.

Taking precaution

By making sure you are diligent in your efforts to properly implement and document pre-employment screening measures, you not only reap the benefits from those measures but also help to decrease your vulnerability to statutory claims and claims of negligent hiring, privacy and discrimination. For information specific to your company, contact an attorney or human-resources professional.

Victoria L. Donati is a partner in the employment law group with the Chicago-based law firm Neal, Gerber & Eisenberg. Jason C. Kim is an associate attorney in the same group.



Complying with FCRA

Generally, the Federal Credit and Reporting Act (FCRA) requires the following when conducting background checks by a third party:

  • Advising the applicant, in writing and separately from the application, that an investigation may be conducted and report generated by a third party

  • Obtaining written permission from the applicant before obtaining the investigation or report

  • Notifying the applicant within three days of retaining a third party to conduct such an investigation that the request has been made and the applicant may request additional information as to the scope of the investigation

  • Providing the applicant with a written summary of rights under FCRA

  • Notifying the applicant of any report generated and the fact that an adverse employment decision may be made on the basis thereof (which notice must also include information about the investigating party)

  • Notifying the applicant of any adverse decision

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