Checkered Record on Background Checks

Thursday, November 2, at 12 noon, U.S. Eastern time

Stephanie Hughes, an assistant professor of strategy at Northern Kentucky University and a onetime agent with the Central Intelligence Agency, is the founder of RiskAware LLC, which performs background checks for universities and corporations, and of the Chapel Hill North Group, which does business and market research for corporations. Ms. Hughes has degrees in marketing and international business from St. Joseph's University, as well as a Ph.D. in international business and strategic management from Temple University.

A transcript of the chat follows.

Martin VanDerWerf (Moderator):
    Hello, and welcome to the Brown Bag. Today, we welcome Stephanie Hughes, an assistant professor of strategy at Northern Kentucky University. Stephanie is also the CEO of RiskAware, a company that does background checks for businesses and universities. Stephanie believes that background checks are an important part of screening job applicants. But she also emphasizes that they must be done consistently. It would be wrong, for example, to do background checks on applicants for staff positions at your college, but not on prospective faculty members or administrators. On that note, let's get started.

Question from Christine Staub, Colby-Sawyer College:
    Who is responsible for interpreting the data and determining whether a candidate or current employee "passed" or "failed" the background check?

Stephanie Hughes:
    Good Question! As the background check provider, we are rally just advisors to the process. We advise HR about whether additional efforts should be taken to clearly identify all relevant information but this decision on what to do with the information is clearly the responsibility of the HR department.

Question from Sharon, large community college:
    What is your view of credit checks?

Stephanie Hughes:
    Worthwhile for some groups of people such as those responsible for handling financial data or any types of personal data. Otherwise, most groups do not employ them across the baord.

Question from Thomas Spencer University Consultant:
    Are there not already federal regulations requiring background checks?

Stephanie Hughes:
    There are when dealing with children, ederly or disabled folks. There is also the Fair Credit Reporting Act (FCRA) that both vendors and employers must abide by. However, each state regulates the application of background checks individually

Question from Jenny Hanewall, U of Wisconsin:
    Vendors generally do a Social Security Trace to determine residency locations which determines where some of the checks will be done. Is there a standard number of years that this trace goes back? The vendor we are using to help with background checks only goes back 7 years for criminal checks, even in the states that will provide records that go back further than that. Is 7 years an industry standard and do you feel this is acceptable?

Stephanie Hughes:
    7 years is standard and there are requirements in some states about reporting certain kinds of data after 7 years. However all convictions can be reported regardless of how far back they are reported.

Stephanie Hughes:
    Several readers have asked about inconsistencies in background checks. Here are some general points from Prof. Hughes: More and more states are now requiring higher education institutions to run checks on all new employees regardless of position. These new requirements do include all faculty, staff and work study students. There are outstanding issues about what to do with existing employees who have never had background checks done on them. Most schools are trying to figure out appropriate policies for how to handle this. I am doing research now on this whole area of policies for how to handle results delivery and the process for checking and re-checking. I hope to have results soon to share with the higher education HR community. I know a lot of HR people are struggling with how to handle these issues.

Question from Peter Neissa, Harvard University:
    I recently received a "release form" from an intitution I have applied to for a tenure-track position. Although I understand the need for background checks, the release form covers more than just a criminal check. For example, this one required a "finance and credit check." Furthermore, the language was so vague that it was quite unclear to me as to when the period of "investigation" would end and who exactly had access to the "investigated material." For example, once I have signed the release form, is it always valid? Once a tenure review process begins five or six years down the road, can they investigate me again? Lastly, does an institution need my consent to make a background criminal check?

Stephanie Hughes:
    Thanks for the question. You addressed a number of issues that remain relatively unresolved from a procedure standpoint among many institutions. To begin with, the organization does need your consent to run a background check which should always include a criminal check at a minimum. The requirements are dependent on each institution's view of the extent of the risk mitigation efforts. The release you sign should only be valid for the initial check unless they explicityly state that there is a policy for rechecking after a period of time. Most schools are starting to realize the inadequacy of their forms and that is where a lot of effort is now being directed. Finally, the requirement for a credit check is typically applied to those handling financial matters so if your position requires that, they are valid to require it.

Question from MACTE (Montessori Accreditation Council for Teacher Education):
    Is there a list of the state regulations, per state, on which ones require background checks on teachers of adults?

Stephanie Hughes:
    Do you mean at the high school level or the university/college level? I am unfamiliar with an organization that would act as a repository of knowledge at the primary through secondary levels although I am certain they exist. At the university level, CUPA-HR (www.cupa-hr.org) does have a section on legislation related to all things HR including background checks.

Question from Shirley Jacob, McKendree College:
    Is there additional liability for an employer who does background checks on staff only, and not on faculty?

Stephanie Hughes:
    The easy answer is yes. This is because the findings have been at the state level and there is a fair amount of variability in state level decisions. However, in general, liability is higher for those that do checks only on one group rather than the whole organization. For one, the affected group could argue discrimination (and they would be right) and the other is if one member of the unaffected group (faculty for example) does something wrong, a jury would reasonably think you could have prevented the act if you had done the checks on everyone.

Question from John Watson, Exec Dir, Higher Ed practice of Arthur J. Gallagher:
    When an institution is just establishing a background check program, are there specific job classifications that you would suggest an institution start?

Stephanie Hughes:
    I am a bit unceratin of the question but let me start by stating that if you are considering startin one of these programs, your liability will potenbtially be affected negatively if you start with only one group rather than a whole segment such as new employees. It is easier to argue the "grandfathering" clause for existing employees than the reasons why one group would represent a higher risk than another.

Question from Austin Winkleman, Saint Louis University (MO):
    It seems to be more common for state institutions to require background checks for all employees (including faculty), but is less common for private institutions. Do you have any trends or statistics on the use of background checks for private institutions?

Stephanie Hughes:
    Great Question! My most recent research idd include private institutions and there is a definite finding that they tend to do this less often than their public counterparts. However, it appears to be increasing and our findings are suggestive of a prior incidence of scandal being a major motivator for adoption.

Question from Donna Pierce small private college:
    We're trying to get a feel for what our peer institutions are doing. Do you have any statistics?

Stephanie Hughes:
    Yes. We do have some limited data and we could share this with you if you'd like. You can send me an email at sfhughes@riskaware.com. We are in the process of collecting more robust data on the small versus large school differences in this area.

Question from Paul, Executive Search Firm:
    What policy and procedure do you recommend when a negative report in a background check surfaces? Typically, we talk to the candidate first to clarify the accuracy of the report. What steps should be taken to ensure the candidate gets a fair shake, while keeping the institution apprised?

Stephanie Hughes:
    As a provider of background check services when we get a negative set of results we recheck the results before sharing them with the institution. This is one small way to err on the side of the candidate. However, the handling of certain negative results, once verified, are dictated by federal and state laws. For example, an institution is required to provide a letter outlining the circumstances of the negative results and information on how to have the results rechecked with the vendor once again if the candidate disputes them.

Question from Bob Andringa, retired association CEO:
    What are the pros and cons of outsourcing background checks vs doing them internally via various web sites?

Stephanie Hughes:
    ACCURACY and LIABILITY are the key issues. Anything other then a county courthouse check for criminal records is risky. There are always going to be inaccuracies in every database because humans are involved. But, many of these online databases are not updated regularly. The issue of whether to do it yourself or outsource fundamentally comes down to your focus. The process of conducting these checks requires a lot of detail and oversight because of liability. AS such, it is recommended that you outsource to someone who specializes in this process.

Question from Martin VanDerWerf:
    You mentioned in an earlier answer that more colleges are perhaps starting background checks because of prior scandals. What makes you say that?

Stephanie Hughes:
    I have actually done research looking at the cost of scandal in higher education and there is a significant increase in both numbers of scandal and the costs associated with it. The more administrators become aware of this cost, the more they look to find ways to mitigate the risk of scandal. Background checks are a standard risk management techique but by no means is it the only one.

Stephanie Hughes:
    To follow up on my answer to the previous question: I mentioned that there are numerous risk mitigation techniques available to administrators. Higher education has not been as aggressive in adopting some of these techniques as have corportate environments. For example, we now have the capability to employ technology as a means to monitor open source sites for information directly relevant to the potential risks surrounding organizations. Another use of available technology is to provide a feedback mechanism for people to provide information to administrators on potential areas of risk.

Question from Cherry Kay Wolf, Texas A&M University System:
    Is it ever a good idea to have built into your rules a series of specifically identified crimes/offenses that will always lead to termination (or specific discipline), or should it always be considered on a case by case basis?

Stephanie Hughes:
    I would say you definately need to do it on a case by case basis. Because as soon as you apply a hard and fast rule you have to make an exception and as soon as you make an exception you have now defined a path that can be argued by a candidate who does not get hired.

Question from Wayne Harris, Xavier University of Louisiana:
    Many hospitals with which we have affiliation agreements are adding a requirement for background checks on students to include criminal checks, federal exclusion lists, even credit checks, etc. Similar checks are being required for faculty at those sites as well. To what extent can we or should we limit the list of checks and how would they be conducted?

Stephanie Hughes:
    Of course if another organization is requiring them you may not have much leeway in negotiating the kind of checks they are requiring. However, it is standard for those that are dealing with the medical space to undergo criminal checks (we do national criminal database and county courthouse checks standard) and checks against the sex offender registry. These checks are done off of the social security trace. Additional requirements such as the federal exclusion lists, credit checks and other types of checks typically depend upon the type of position for which one is applying. For example, if faculty are conducting research the institution may require the federal exclusion lists checks because the research may have some type of security emphasis associated with it. Finally, credit checks are typically done for anyone who is dealing with sensistive personal data such as social security and those dealing with financial matters.

Question from John Watson, Arthur J. Gallagher's Higher Ed Practice:
    So far questions have been asked regarding criminal and credit checks. Can you advise what other background checks should be considered for all prospective employees?

Stephanie Hughes:
    Other checks you might want to consider for all prospective employees includes educational credentials, professional license check, reference checks, sex offender, employment verification, and potentially motor vehicle depending upon the position.

Question from Timothy Orr, counsel to private colleges in South Carolina:
    What about student employees? Do you recommend the same treatment?

Stephanie Hughes:
    The problem with credit checks for students is that there is chance that there may be limited information. However, if the student will deal with social security numbers he or she still does represent a significant risk and should be checked. It is my recommendation that in addition to criminal checks, reference checks and prior employment checks are most useful for this category of employee.

Question from Patricia, small community college:
    How should we decide whether to do a county, state or federal background check? I understand that different information is gathered from each, but the more we ask for, the greater the costs!

Stephanie Hughes:
    Here is what I would suggest. Two types of checks should be done - federal check and the county courthouse check. The federal check is done as a catch-all because the social trace only reveals locations of residence and it is possible that someone was traveling and committed a crime for which there would be a record in the juridistiction in which they are traveling. The social trace would not indicate that we should look in that jurisdiction and so we would miss a possible criminal record if we did not do the federal check. The county courthouse check is the most accurate and therefore should always be checked. One final thing - you can work with vendors to limit the cost of the county courthouse check.

Question from Urban university:
    The AAUP,in a November 2004 report entitled Verification and Trust: Background Investigations Preceding Faculty Appointment (2004)came out strongly against faculty background check as a geneneral policy. Have you seen any change in this position since it was issued? What have you seen done to address faculty concerns about backgrounds checks as an unnecessary invasion of privacy.

Stephanie Hughes:
    I am aware of the 2004 position of the AAUP and I have not seen any change in their official stance. However, the changing legal landscape associated with liability and the variability of employing background checks are the major factors that are driving the shift toward greater utilization across groups on campus, including faculty. What most universities appear to be doing at this point in time is developing policies that include checks for all new employees including faculty.

Martin VanDerWerf (Moderator):
    We're out of time. Thank you for your questions, and for sharing some time with us. Thank you also to Stephanie Hughes for joining us.