COLUMN ONE : Applicants: Past May Haunt You : Worried by workplace crime, more employers are using background checkers. These firms comb court, injury records or keep databases--sometimes faulty ones--often without candidates’ knowledge.


Tucked away in a nondescript two-story building on a quiet street in Simi Valley, an obscure firm known as EMA-SPA keeps private files that are the kiss of death for thousands of job hunters.

EMA-SPA says its “incident files” catalogue people fired because their bosses concluded that they were stealing, using drugs or harassing co-workers while on the job, among other things. The dossiers also name department store customers nabbed by security guards and accused of shoplifting.

The trouble is, many--and perhaps most--of the estimated 200,000 people with blemished records on file have never been arrested for these purported wrongdoings. Commonly, they don’t even know what EMA-SPA is or that their name is on file.


But that hasn’t stopped employers from Circuit City Stores to Tiffany & Co. to Reno Air from consulting with EMA-SPA before deciding whether to hire an applicant or keep a new probationary employee.

Accused at age 16 of trying to steal a T-shirt from Robinsons-May? Your prospects of getting a job at another of EMA-SPA’s 150 clients--including dozens of California’s biggest retailers--may be doomed, or at least clouded, for years.

Welcome to the little-known but flourishing business of pre-employment background checks. Prompted by concerns about everything from workplace violence to embezzlement, employers are digging ever more deeply into applicants’ personal histories.

Without background checking, asked Leif J. Lauritzen, EMA-SPA’s president and chief executive, “how do businesses know who they are hiring in an anonymous and mobile world?”

Yet the job of answering that question often falls to a spottily regulated realm of corporate security firms, detective agencies, credit bureaus and other companies, many newly formed.

Typically, these firms check computer databases or comb through court, credit and driving records--and sometimes medical histories, job injury claims and police reports. EMA-SPA goes a step further, using its own private files to scrutinize candidates.


For years, many employers have verified resumes and given applicants drug tests and, to a lesser extent, psychological exams. Genetic tests and even handwriting analyses also have been used.

The rise of background checking, however, signals the harnessing of technology and other investigative tools to exhume details and incidents that applicants once could--rightly or wrongly--write off as ancient history.

As such, privacy experts say, it poses a growing threat to fairness, particularly when the checkers rely on consumer credit reports and other frequently inaccurate databases. A 1990 survey of 161 credit reports by Consumers Union, for instance, found 19% contained “major inaccuracies.”

Even worse, privacy advocates say, the trend threatens to relegate job hunters who may have had scrapes with the law as teen-agers to an underclass with little chance of finding decent employment.

“It’s so easy when you see something in a background check that doesn’t look so wonderful to throw the resume in the wastebasket and look at someone else,” said Lewis Maltby, workplace rights director for the American Civil Liberties Union.

But the demands of the competitive business world and the threat of costly litigation involving rogue employees give employers strong financial incentives to step up pre-employment screening. In a survey of 500 large companies, the American Management Assn. found that 42% check whether candidates have criminal records. Two-thirds said they perform some type of background check, including such traditional practices as calling past employers.


Nor are background checks performed only for big business. Parents interviewing prospective nannies sometimes use investigative firms to ensure they don’t end up making a potentially tragic mistake, such as hiring a convicted child molester.

Depending on complexity, the checks typically cost from $20 to $200. In spite of concerns that some checkers overstate how foolproof their services are, that’s a price many employers are happy to pay.

The Postal Service, shaken by an array of shooting sprees involving employees, hired a background-checking firm in September, 1993, to screen candidates at a cost of less than $30 per person.

Like other employers, the Postal Service lacks solid evidence that background checks actually reduce violence or other workplace problems. But spokesman Roy Betts said postal officials “sense” they are receiving fewer applications from people with criminal convictions, bad driving records or dishonorable military discharges.

“The word is out on the street that the Postal Service is scrutinizing applicants a lot more closely,” he said.

While there is no one law covering workplace privacy rights in general or pre-employment screening in particular, a patchwork of state and federal laws apply. These include civil rights acts, fair credit statutes and laws intended to prevent discrimination against the disabled and people who have filed workers’ compensation claims.


As a practical matter, though, the laws often are ignored or artfully manipulated, opening up opportunities for abuse.

Take, for example, the federal Fair Credit Reporting Act, probably the most important law pertaining to pre-employment background screening. The act requires that applicants be told when they are rejected for jobs because of information uncovered in “investigative consumer reports” or more conventional credit checks.

But experts say violations by employers often go undetected. The result: Many people aren’t even aware that their prospects were doomed by a background check.

California law, which provides broader privacy protection than federal statutes, requires that job hunters be notified before a routine credit review or other types of background checks. To satisfy that requirement, however, many employers simply put an inconspicuous note on their applications.

At times, workers find out the hard way that their backgrounds have been checked.

Consider James Russell Wiggins Jr., a 40-year-old father of four now working as an emergency medical technician. In December, 1989, he accepted a sales job with District Cablevision, a cable TV company in Washington, D.C.

The next month, a unit of the giant consumer reporting firm Equifax Inc. conducted a background check on Wiggins for District Cablevision and concluded that he recently had been convicted on a cocaine charge.


But the background checker had researched a different James R. Wiggins.

District Cablevision declines to comment, but Equifax acknowledges the mistake, saying its reviewers swiftly corrected the error within days after the “right” Wiggins protested.

By then, the damage was done; some of the facts are in dispute, but Wiggins claims in a lawsuit against the two firms that he already had been fired. The case is awaiting trial in federal court.

Another problem, critics say, is that background checkers sometimes dig up police records that are not supposed to be publicly disclosed. Fred Hurtado, 38, who works for the U.S. Postal Service in San Francisco, says that practice once cost him a job.

In 1986, Hurtado said, he was dismissed from a position cleaning buses for Greyhound less than a week after he was hired.

The reason: A firm that conducted a new-employee background check for Greyhound reported that Hurtado was arrested in 1979 on a battery charge and in 1983 on charges of unlawful use of a weapon and drinking in public.

However, Hurtado never was convicted on two of the charges, and his conviction on the third was expunged after he successfully completed probation. The California labor code explicitly bars employers from asking applicants about arrests that have not led to felony convictions. State regulations prohibit questions about expunged convictions.


Nonetheless, Hurtado said, he was confronted by his supervisors about the arrests and was told he could keep his job if he answered their questions truthfully. “I was nervous and scared,” he said. “I didn’t know what to expect.”

So, Hurtado acknowledged the arrests. Then, he said, his bosses broke their promise and told him they would have to let him go.

He later sued Greyhound and its background-checking firm, winning small settlements, the details of which were kept confidential. Greyhound, noting that it was under different ownership when Hurtado worked for the company, declined to comment.

Hurtado, who is Latino, voices a concern shared by many privacy advocates: He says the potential misuse of arrest and conviction data especially hurts minorities, because they more often are singled out by police.

“A lot of people like me--Latino people and black people--they’re going to be left out in the dark because at one time or another, they were picked up for something,” he said.

The story of EMA-SPA, a pioneer in the field, sheds light on how a background checker became a fixture in an industry--in this case, retailing--and what the consequences can be.


EMA-SPA--whose complete name is Employers Mutual Assn. United/Stores Protective Assn.--was founded in 1929 by members of the families that launched the May and Bullock’s department stores. The rationale for their joint effort: “They perceived that no one stole from just one of them,” said EMA-SPA’s Lauritzen.

Today, EMA-SPA is a nonprofit company with 30 full-time employees in Simi Valley. Its roughly 150 clients pay yearly fees of $120 and, ordinarily, anywhere from $1.60 to $75 per background check, depending on the range and complexity of the job.

The firm’s only officer is the hands-on, 53-year-old Lauritzen. He joined EMA-SPA as a computer analyst in 1971 and worked his way up.

Lauritzen describes the service his organization provides employers in lofty terms. On one level, he said, background checking of the sort EMA-SPA provides is an antidote to a permissive society. The message of his industry, Lauritzen said, is that “there are repercussions associated with your actions.”

Moreover, he said: “Dishonest employees raise the cost of business, and those costs are passed on to customers.” As such, he added, the use of the company’s “incident file” records “is not a fanatical crusade. It’s a legitimate use of factual information with appropriate safeguards built in.”

Lauritzen said EMA-SPA’s record-keeping stays safely within laws that ban blacklisting of job hunters, because its records are more than just listings of people accused of workplace “incidents.” Besides the 200,000 people with blemished backgrounds, he said, company data includes employment histories of 100,000 people with untainted records.


While contending that EMA-SPA’s records have long been nearly 100% accurate, Lauritzen said that he recently tightened company procedures to further protect the integrity of the data. In January, the firm started to notify applicants by postcard any time it discloses information from its files to an employer; the notice tells applicants they can contact EMA-SPA if they would like to check or challenge the records.

To comply with the fair-credit law, Lauritzen says he also urges employers to notify applicants when information from EMA-SPA’s files or research is the reason for rejection.

Still, Lauritzen and others acknowledge that some employers probably ignore such guidelines, figuring that if they ever are pressed on the issue, they can cite other reasons.

Peter E. Sheehan, a lawyer with the Legal Aid Society of Alameda County who specializes in privacy issues, says another problem with EMA-SPA’s service is that many employers have computer access to the names on file.

Sheehan, who once sued EMA-SPA on behalf of a fired Macy’s of California employee, said he suspects that employers with such access sometimes reject applicants or get rid of probationary employees simply if their names appear on the list--even though roughly one-third of the people in EMA-SPA’s database never have been accused of “incidents.”

Lauritzen conceded that the potential exists for such lapses in the company’s service. “It’s not fool-proof,” he said.


Even when the system works the way it is supposed to, that is cold comfort to people such as John, a sales clerk who recently lost his department store job.

As John tells it, the store fired him after two months--despite his good performance--because of information from EMA-SPA.

“I didn’t know this company (EMA-SPA) existed until . . . I was fired,” he said.

John, who declined to give his last name, didn’t dispute the gist of EMA-SPA’s information; he admits stealing from a previous employer nearly six years ago, when he was 19. Further, he agrees that employers should check the backgrounds of applicants and new probationary employees.

“If I was an owner of a company, I’d want to have this service,” he said.

In John’s view, however, it is unfair for a mistake he made as a teen-ager to haunt him: “I was a different person then. I’m married now. I have a baby on the way.”

While admitting that he “had done something really stupid,” John said, “I thought I had put it behind me. But now I’m going to have to deal with it.”

Lauritzen has few misgivings about disseminating information going back seven years--the time limit EMA-SPA keeps on negative information in its files. His customers “are of the opinion, and I guess so am I, that people don’t change a whole heck of a lot.”


For the people who lose out on jobs because of blemishes on their records, “I have empathy, but I can’t sympathize. They did bring it on themselves,” Lauritzen said.

“If we have a problem in this world,” he added, “it’s that we’re too forgiving.”