The Seven-Year-Old Misdemeanor and the Missing Adverse Action Letter
Coastal Logistics in Miami runs a warehouse with 120 employees. It makes conditional offers to forklift operators. The offer letter says employment is contingent on a background check by a third-party consumer reporting agency. Marisol, a 29-year-old Latina applicant, receives a conditional offer. The report shows a 2018 misdemeanor retail theft conviction (she was 22) and a 2016 dismissed charge. The hiring manager tells HR 'we can't hire a thief' and withdraws the offer by phone the same day. No pre-adverse action notice, summary of rights, or adverse action letter is sent. The CRA's report also included a 2014 arrest that was sealed, and the employer did not ask about it. Marisol had five years of warehouse experience and a valid forklift certification. She asks whether the employer violated the FCRA and whether she has a discrimination claim. The company has a written policy against hiring anyone with a theft conviction, applied to all applicants.
1. Identify the FCRA violations and what the employer should have done.
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Coastal violated the FCRA's adverse-action process. Before taking adverse action based on a consumer report, the employer must provide the applicant a copy of the report and the FTC summary of rights, often called the pre-adverse action notice. After a reasonable waiting period, it must provide an adverse action notice with the CRA's contact information, a statement that the CRA did not make the decision, and notice of the applicant's right to dispute. The FTC treats five business days as a safe harbor. Coastal did neither and instead withdrew the offer by phone the same day. It also relied on a sealed 2014 arrest; the CRA may have violated FCRA reporting limits, and the employer should not use sealed or obsolete records. Willful violations can carry statutory damages of $100 to $1,000 per consumer, punitive damages, and attorney's fees; negligent violations require actual damages.
2. Analyze Marisol's Title VII disparate impact claim using the EEOC's conviction factors.
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A blanket ban on anyone with a theft conviction can disproportionately exclude protected groups. Under EEOC guidance, the employer must validate the policy as job-related and consistent with business necessity using three factors: the nature and gravity of the offense, the time elapsed since the conviction, and the nature of the job. Marisol's 2018 misdemeanor is about six years old; the forklift job does not involve cash handling or access to retail merchandise; and her five years of warehouse experience and certification support rehabilitation. The employer made no individualized assessment and relied on a manager's slogan. Marisol must still show disparate impact through statistics or other evidence, but the policy as applied is vulnerable. The Florida Civil Rights Act mirrors Title VII and provides a state-law claim as well.
3. Does the written policy against hiring anyone with a theft conviction help the employer?
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No, a written policy applied to all applicants does not immunize the employer. Consistency is not a defense to disparate impact; business necessity is. The policy may be a legitimate screening tool, but it must be tailored to the job and allow for individualized assessment. The employer should revise the policy to focus on job-related convictions, impose reasonable time limits, and require an individualized review that considers the EEOC factors. It should also train hiring managers not to announce 'we can't hire a thief' by phone and to route all background-check decisions through HR. Finally, it should fix its FCRA notices and stop using sealed or obsolete records.