UPDATE: Sept. 24, 2024: An ADP spokesperson told HR Dive the company's procedures comply with Fair Credit Reporting Act requirements and that it disagrees with the claims alleged in Swift.
"While we dispute these allegations, we cannot comment further as this is an ongoing litigation matter," the spokesperson said via email.
Dive Brief:
- A Texas job candidate sued ADP Friday, alleging he lost out on a job offer due to a falsehood-laden background check produced by the company which reported he had been convicted of a first-degree felony.
- The plaintiff in Swift v. ADP Screening and Selection Services, Inc., applied for a job in 2024 and submitted to a background check. The prospective employer hired ADP to conduct the check, and the firm’s report allegedly found that the plaintiff had been convicted on felony charges in 2017 under a different name. He was not hired. The plaintiff claimed that he obtained a copy of his background report from a separate company that did not contain the alleged errors.
- The plaintiff filed a dispute with ADP, and the company later corrected his record. He alleged violations of the Fair Credit Reporting Act and asked the U.S. District Court for the Western District of Texas for relief including damages as well as a jury trial. An ADP spokesperson did not immediately respond to a request for comment.
Dive Insight:
ADP background checks have been the subject of several lawsuits in recent years alleging documents included false red flags that harmed candidates’ job prospects. Two months ago, ADP settled for an undisclosed amount a lawsuit filed by a job candidate who alleged his report falsely showed that he had a murder conviction.
And in 2023, the company settled a separate suit involving allegations that an ADP background check incorrectly reported that a job candidate was a convicted drug dealer. Settlement details for the case were similarly undisclosed.
Background checks have not always proven accurate despite their extensive use by recruiters. A February 2024 study published in the research journal Criminology found that background checks for more than half of a group of 101 New Jersey residents had at least one false positive, while some 90% of checks had a false-negative error.
“Consumer reporting agencies that create background reports, like ADP SASS, are charged with using reasonable procedures designed to ensure the maximum possible accuracy of the information they report,” according to the complaint in Swift. “It is not enough for them to simply parrot information they receive from entities, particularly where a consumer makes a dispute about information reported.”
Previously, employee advocates have advised HR teams to delay the use of background checks in the hiring process, particularly until after an offer has been made to a candidate. In one guidance document, the U.S. Equal Employment Opportunity Commission cautioned employers to ensure their background checks and procedures are job related and consistent with business necessity.
