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Employers Need to Grasp Risks of Continuous Monitoring Services

Employers should think twice before contracting for the continuous monitoring of an employee’s credit and criminal history, as alerts for these could lead to potential liability under the Fair Credit Reporting Act (FCRA). According to Sidley Austin LLP attorneys, the FCRA states that a “consumer report” cannot be used for “employment purposes” unless a clear and conspicuous disclosure has been made in writing to the employee before the report is obtained and the employee consents in writing. In addition, whether a continuous monitoring service can be considered a consumer reporting agency has been under heavy review in recent cases, where courts have routinely held that whether a company is a consumer reporting agency depends on subjective intent. Employers who want to use a continuous monitoring service should seek legal advice to determine law obligations, determine that disclosures are appropriate to mitigate risk, obtain consent in advance of procuring the report, consider instituting a procedure for handling the alerts, and conduct a careful review of the services’ terms and conditions.

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Post By Ken Shafton (848 Posts)