The “Seven-year Rule” for adverse information

The “Seven-year Rule” for adverse information

What is the “Seven-year Rule?” When reading the Fair Credit Reporting Act (FCRA), you see that it allows non-conviction criminal information to be reported for up to seven years. A question that often comes up is, when does the seven-year count begin?

What is a record?
First of all, let’s clarify what a record is. Your criminal history record is a list of your arrests and convictions. When you apply for a job, an employer will usually hire a consumer reporting agency such as GroupOne Background Screening. The report we provide is not really your official criminal history; rather, it is a report of what we found based on public records.

Under federal law, GroupOne cannot report an arrest that is over seven years old. However, we may report a conviction no matter how old it is. If you are arrested and the charges are dismissed, the consumer reporting agency is not supposed to report the arrest if the arrest is over seven years old. However, if the arrest results in a conviction then the agency can report the information forever.

FCRA Time Limit
At the heart of the issue is the FCRA provision that limits how far back a consumer reporting agency can report adverse information in a background check. A recent brief filed in the U.S. Court of Appeals for the Ninth Circuit on October 4, 2013, Moran v. The Screening Pros LLC (Case No. 12-57246), states the clock starts when the adverse information is first filed into record.

An adverse item is can be reported only if it antedates the report by seven years or fewer. The report in this case, made in 2010, listed a misdemeanor drug charge from 2000 that was dismissed in 2004. The lower court concluded that the drug charge could be reported for seven years from the date the charge was dismissed.

The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) say the court decision was wrong because of a 1998 amendment to the FCRA. They believe the seven-year reporting period for the dismissed drug charge should have started on the date of the charge and ended in 2007. Clear as mud?

Just the Facts
The FCRA has no exact time limitations on reporting criminal convictions. Some states do have limitations on the length of time records may be reported. In addition, many employers limit the use of older convictions for other, non-FCRA reasons. The use of older convictions may not pass the scrutiny of the Equal Employment Opportunity Commission (EEOC) for being job-related. EEOC guidelines state that an employer must consider the amount of time that has passed since the offense when deciding whether to use the information in an employment decision.

Overall, in the criminal history reporting context, the Seven-year Rule provides almost no protection to job applicants with arrests.

What does it mean?
Employers should review policies on using non-conviction information. If you want to consider records of arrest resulting in dismissals and other non-conviction records, check with GroupOne to see how the time is being calculated, and take into consideration state laws.

Employers should also consider how older records are relevant to specific positions. EEOC guidance says employers must consider the time that has passed since the offense and determine if the offense is relevant to the job. If older offenses are important, document the reasons in the job description and policy.

 

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