You “Failed” a Background Check. There Is No Such Thing — Here Is What Actually Happened, and What You Are Owed

The recruiter’s e-mail says the offer is withdrawn because you did not pass the background check. It reads like an exam result, and that is the first thing to understand: a background check has no pass mark. The screening company does not grade you. It sends the employer a report, and the employer decides against you on something in it. “Failed” is a word for a decision, and a decision made on a report is a thing federal law regulates in detail — including what you must be handed before it is made, and what you can do when the report is wrong.

What “failed” actually means

Screening companies report; employers decide. Some report formats flag an item for the employer’s attention under the employer’s own hiring criteria, and a flag is what many applicants are told they “failed.” Behind the word there is always a specific entry: a criminal record, a civil case, a credit item, an employment or education verification that did not match, a driving record. That entry is either yours and accurate, or it is not — and a large share of the “failed” checks I review fall in the second group: a case that was dismissed or expunged and still reported as pending, a record belonging to someone with your name and date of birth, a verification the company marked “unable to confirm” because a former employer never answered the phone. Which entry it was is the first thing to find out, and the law is built so that you can.

What you were supposed to be given before the decision

Under the Fair Credit Reporting Act, an employer that intends to act against you on a report must first give you a copy of that report and a written summary of your rights, before the decision is made — the FTC’s guidance for employers puts it plainly: the advance notice exists so that “the person has an opportunity to review the report and explain any negative information.” An e-mail that withdraws the offer and encloses the report in the same breath has skipped the step. If you never received the report at all, the employer skipped it too, and that omission is a claim of its own. Job offer rescinded after a background check walks through that sequence and what to do at each point in it.

What you must be told after

After the decision the employer must tell you that it acted on the report; give you the name, address and telephone number of the screening company; tell you that the company did not make the decision and cannot explain it; and tell you that you may dispute the report’s accuracy and obtain a free copy from the company within 60 days. That last sentence is the one to use. Ask the screening company for the report in writing, today; the company must give it to you, and it is the only way to see what the employer saw.

Reading the report for the error

Read every entry against your own records. The errors that produce a “failed” result are a short list: a dismissed charge shown as a conviction or as pending (dismissed charges still on a background check); an expunged or sealed record that should not appear at all (expunged record still on a background check); a record that belongs to another person matched on name alone; an arrest older than seven years; a job title, dates or degree marked unverified when your own paperwork proves them. A screening company must follow reasonable procedures to assure maximum possible accuracy, and when it reports public records for employment it must either tell you at the time or keep the record current and complete — a dismissed case reported as open is neither. Background check errors goes through each of these with the complaint data behind them; the statutory rules, with their section numbers, are on one page at Background Checks by the Numbers.

Dispute it in writing, and tell the employer you have

Dispute the entry with the screening company in writing, naming the exact item and attaching what proves it wrong — the dismissal order, the expungement order, the diploma, the W-2. The company has 30 days to reinvestigate and must correct or delete what it cannot verify. Then write to the employer: tell it the report is under dispute, enclose the proof, and ask it to hold the position or reconsider. Employers are not required to wait, but many will when the error is documented, and the letter is evidence either way. How to dispute a background check has the letter and the order of operations.

When it becomes a legal claim

If the report was wrong and the job is gone, the Fair Credit Reporting Act gives you a claim against the screening company that reported the error, and a separate claim against the employer if it acted without giving you the copy and the summary first. For a negligent violation you recover your actual damages — the wages from the job you did not get, the offer you turned down to take this one, the months of searching — and your attorney’s fees. For a willful violation the Act adds statutory damages of $100 to $1,000 per violation and allows punitive damages. Suit must be filed within two years of discovering the violation and never more than five years after it happened. Because the fees shift to the company when you win, I take these cases on contingency: you pay nothing unless we win. Employment background checks sets out how I handle the screening company and the employer as separate defendants.

Keep the withdrawal e-mail, the report, every letter and its delivery record, the company’s reinvestigation result, and the pay figures for the job you lost. That file is the case. I review it at no cost.

Admitted in Pennsylvania and New Jersey; available to appear pro hac vice in other federal courts. You pay nothing unless we win.

Sources: 15 U.S.C. §§ 1681b(b)(3), 1681c(a), 1681e(b), 1681i, 1681k, 1681m(a), 1681n, 1681o and 1681p (United States Code); Federal Trade Commission, Background Checks: What Employers Need to Know (with the Equal Employment Opportunity Commission); Consumer Financial Protection Bureau, A Summary of Your Rights Under the Fair Credit Reporting Act (12 C.F.R. part 1022, Appendix K).