FACTA and Employee Misconduct Investigations

Answered by:

Question:

During several phone seminars regarding the FACT Act, reference has been made to a provision on the Act which will deal with requiring procedures for "employee misconduct investigations." However, now that regulations have started coming out re: the FACT Act, this reference to "employee misconduct investigations" seems to have vanished from the lists of what is or will be covered by the FACT Act regulations. Could you clear this up for me?

Answer:

Answer by Andy Zavoina: The word "misconduct" is neither in the 1997 amended FCRA nor the commentary to the FCRA under 16 CFR 600. It is in the new FCRA at 603(x)(1)(B)(i) which excludes certain communications for employee investigations.

Answer:

Answer by Mary Beth Guard: Under a 1999 FTC staff opinion known as the "Vail" opinion, if an employer was going to utilize a third party to do an investigation of an employee, the employer was supposed to (1) notify the accused of the investigation, (2) seek consent from the accused, (3) provide the accused with a copy of the report, or (4) wait a "reasonable" amount of time between giving the accused a copy of the report and taking adverse action. FACTA effectively legislatively reverses the Vail opinion and, as a result, employers no longer have to take those steps. For full details about the conditions under which a consumer report may be pulled in connection with employment purposes, see Section 604 of the amended FCRA:

http://www.ftc.gov/os/statutes/031224fcra.pdf

First published on BankersOnline.com 1/31/05