Legislative Update

Legislative Committee Report
James S. Cawood, CPP
Chairman
510-352-8660

As many of you are aware, the Fair Credit Reporting Act or FCRA was amended three years ago and these amendments affected both every pre-employment investigation and every post employment investigation of employee mis-conduct. Much has been written and discussed about these changes, but the purpose of this column is to inform you that a bill has been introduced into the Congress to amend the law in a way which will repair much of the damage which has been created in the post-employment arena.

H.R. 3408 needs the support of every company and security professional to make this change a reality. Below I have attached the statement of Congressman Sessions when he introduced the bill, which might be of great interest to your legal counsel or senior management, as well as the bill itself for reference. I have also provided a sample letter which was drafted by the National Council of Investigative and Security Services (NCISS) for use by anyone who might want to send a letter to their Representatives in support of this bill. Letters have a tremendous impact on Congressman, while emails are not as effective. I would encourage those interested to get involved and send hard-copy letters to their Congressional Representatives.

To generate a personalized letter to mail into your Representative, please click on this link.

Statement of Congressman Pete Sessions upon introduction of the Fair Credit
Reporting Amendments Act of 1999:

Mr. Speaker, today I introduce legislation to provide a technical
clarification of the Fair Credit Reporting Act (FCRA). This
clarification is necessary to protect workers and small businesses from
unsafe work conditions and to root out illegal activity in the
workplace.

Provisions of the Fair Credit Reporting Act (FCRA) as amended in 1996 undermine investigations of sexual harassment, embezzlement, workplace violence, drug sales and other illegal activities in the workplace.

Because of an interpretation by the Federal Trade Commission (FTC) of the 1996 FCRA amendments, employers who retain investigators, attorneys, or others to conduct inquiries into unlawful activities subject themselves to the provisions of the Act and must:

Provide notice before initiating an investigation
Obtain written authorization from the suspect and other employees
Upon request, disclose the nature and scope of the investigation
Prior to taking any adverse action against an employee, provide the employee a complete and unedited copy of the investigative report.

When the FCRA amendments were passed in 1996, Congress did not intend for such burdensome restrictions to be placed on employers who seek to provide safe, crime free workplaces for their employees.

The Occupational Safety and Health Act requires employers to provide a safe and secure workplace. And Civil rights laws require employers to investigate allegations of sexual harassment and discrimination. Yet, the FCRA makes such inquiries impossible. Even if the employer is able to persuade a suspect employee to consent to an investigation, the investigation could still be thwarted by the accused who may be able to cover his tracks. Even more important is the chilling effect of providing investigative reports to suspected miscreants. What witness will be forthcoming when they find out the accused will know who spoke to the investigator? What is the logic of asking a deranged employee if you can investigate him?

Americans are all concerned with the rise in incidences of workplace violence, including killings this month in Seattle, Washington and Honolulu, Hawaii. At a time when we are all concerned about workplace violence, the FCRA is tying the hands of employers who attempt to protect their employees.

The application of the FCRA is far broader than Congress intended when the law was amended in 1996. It now undercuts virtually all workplace investigations and may impact on legitimate inquiries outside of the workplace as well. Congress needs to make clear that these investigations are not covered by the Act.

The legislation I introduce today, the Fair Credit Reporting Amendments of 1999, has been drafted through a careful bipartisan process. Concerns from consumer groups and the FTC were incorporated into the final draft of this legislation. The legislation removes the requirement of employee consent for an employer to investigate a limited number of illegal or unsafe activities in the workplace. Theses limited activities include drug use or sales, violence, sexual harassment, employment discrimination, job safety or health violations, criminal activity including theft, embezzlement, sabotage, arson, patient or elder abuse, and child abuse.

Additionally, should an employer seek to use such a report to take any action against an employee, the employer must inform the employee that a report was prepared as well as the nature and substance of the report.

This is important legislation that should be considered early in the next session of Congress. I urge my Colleagues to join as cosponsors and push for speedy passage of this bill to reduce crime and provide safer workplaces.

106TH CONGRESS
1ST SESSION
H. R. 3408
IN THE HOUSE OF REPRESENTATIVES
Mr. SESSIONS introduced the following bill; which was referred to the Committee on Banking And Financial services
A BILL
To amend the Fair Credit Reporting Act to exempt certain investigative reports from the definition of consumer report, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the
''Fair Credit Reporting Amendments Act of 1999''.

November 16, 1999

SEC. 2. CERTAIN INVESTIGATIVE REPORTS EXCLUDED FROM DEFINITION OF
CONSUMER REPORT.
(a) IN GENERAL.-Section 603(d)(2)(A) of the Fair Credit Reporting Act (15
U.S.C. 1681a(d)(2)(A)) is amended-

(1) by striking ''or'' at the end of clause (ii);
and
(2) by inserting after clause (iii) the following new clauses:

''(iv) report, subject to section 609(d), prepared by an employee or agent of a consumer's employer solely for the purpose of investigating allegations of drug use or sales, violence, sexual harassment, employment discrimination, job safety or health violations, criminal activity including theft, embezzlement, sabotage, arson, patient or elder abuse, child abuse, or other violations of law; or

''(v) report prepared in connection with litigation, anticipation of litigation, due diligence, investigation of insurance claims, civil and criminal fraud, failure to pay child support, or any other violations of law;''.

(b) DISCLOSURES TO CONSUMER.-Section 609 of the Fair Credit Reporting Act (15
U.S.C. 1681g) is amended by adding at the end the following new sub-
section:

''(d) CONDITIONS ON USE FOR ADVERSE ACTIONS.-With respect to any report described in section 603(d)(2)(A)(iv) relating to an employee-

''(1) before taking any adverse action based in whole or in part on such report, the person intending to take such adverse action shall disclose to the employee the nature and substance of the information in the report on which the proposed adverse action is based; and

''(2) if any action is brought by the employee, the information in the report shall be available to the plaintiff under appropriate discovery procedures of the court in which such action is brought.

SAMPLE LETTER

The Honorable _________
United States House of Representatives
Washington D.C. 20515

Re: HR 3408
Fair Credit Reporting Amendments Act of 1999
Dear Representative____________

As a constituent, I am writing to request that you support HR 3408 with your vote and by adding your name as a co-sponsor. This critical legislation will remedy the unintended consequences which resulted from the amendments to the Fair Credit Reporting Act in 1996.

The requirements of the 1996 amendments pose a serious threat to worker safety and have had a chilling effect on violence, drug abuse and sexual harassment investigations in the workplace. This situation cries out for a bipartisan, common sense correction such as has been proposed by Representative Sessions and others of both parties, in this amendment.

Please have your staff contact Martin McGuinness of Representative Sessions' office at (202) 225-2231. Thank you very much for your attention and support.

Yours truly,
James Cawood

To generate a personalized letter to mail into your Representative, please click on this link.