Friday, March 14, 2008

Personnel Background Checks and HR 5577

The Chemical Facility Anti-terrorism Act of 2008 (HR 5577) has a rather lengthy section (Section 2114) dealing with the requirements for background checks for employees and contractors at covered chemical facilities. These were included at the behest of labor organizations. They feared that the management at chemical facilities could use the nebulous requirements included in the CFATS regulations to unfairly retaliate against employees and union organizers.


CFATS has ‘Personnel Surety’ as one of the risk-based performance standards outlined in Section 27.230. That section requires that high-risk facilities perform ‘appropriate background checks’ that include identity verification, criminal history checks, verification of authorization to work and checks to identify people with terrorist ties.


As with other performance standards, it was intended that higher-risk facilities would use higher standards to screen their employees. Additionally, the Secretary was forbidden by the authorizing legislation from requiring specific security procedures. This left a great deal of latitude to the facility management in how they addressed this requirement in their Site Security Plan.


Secretary Required to Issue Regulations


HR 5577 requires that the Secretary develop specific regulations concerning the background checks required to be conducted by ‘high-risk tier’ facilities. Those regulations are required to spell out the disqualifying offenses and how recent those offenses must be to remain disqualifying. The regulations must explain how the background checks are to be conducted and what biographical information the employees must provide. Finally, the regulations must provide for a procedure for employees to seek redress from an adverse finding during the background check.


Facilities failing to comply with these procedures are subject to Department sanctionsunder Section 2106 of this law. This section on background checks emphasizes that a facility without an ‘adequate’ system of redress cannot be considered to be in compliance with this section.


The intent of Section 2114 is to remove some of the leeway that had been included in the current CFATS regulations. Unfortunately, I think that this new section will result in more dismissals than it prevents. It does not provide for any procedures for an employer to retain someone that has committed one of the disqualifying offenses. There are no provisions for extenuating circumstances or credit for faithful service.


Limiting Dismissal of Employees


The proposed regulation specifically prohibits the dismissal or suspension of anyone based on a background check unless they have been convicted of, have been found not guilty of by reason of insanity of, or is under want, warrant, or indictment for:


  • a permanent disqualifying criminal offense listed in part 1572 of title 49, Code of Federal Regulations
  • of an interim disqualifying criminal offense listed in part 1572 of title 49, Code of Federal Regulations, within 7 years


Additionally, people that are known terrorists (or with terrorist ties), have been incarcerated within the last 5 years for an interim disqualifying criminal offense, or have been found not to be not legally qualified to work in the United States are also exempted from the prohibition of dismissal.


The list of offenses is the same used to deny truck drivers HAZMAT certifications. This has the advantage that it is an already existing list so it should cause no new fights over this bill. The downside to using this list is that chemical facilities may not keep up to date on changes to this DOT regulation unless they have truck drivers on staff.


Redress Procedures


This section states that the regulations developed by the Secretary for background checks must require that the affected facilities give any employee dismissed or suspended due to a required background check the same redress rights given under section 70105(c) of title 46. Furthermore, the employee is due full pay and benefits during the complete appeal process.


These redress rights include the right to have an appeal hearing before an Administrative Law Judge, the right to review an unclassified summary of any classified evidence, and full disclosure of any public record used in the background check process. Employers are required to fully explain these rights at the time that the adverse employment actions are taken.


The Secretary has been given the authority to direct an appropriate remedy, to include reinstatement, for anyone that was found to have been inappropriately dismissed or suspended due to a background check executed under authority of this Section. Theoretically, this means that the full weight of the Federal Government is being used to protect employees from improper dismissal under these background check requirements.


Restrictions on Use of Information  

The facility is required to maintain records of each background check conducted on current employees. Since these checks may contain adverse, but not disqualifying information, the facility and the Secretary are charged with keeping these records confidential. The only people at the facility that are allowed to see these records are those whose duties actively involve evaluation of those records for purposes of these regulations.


Interestingly the Secretary is allowed {in para (e)(3)} to use this information  only for making determinations under this section.” Then, in the next sentence {para (e)(4)} the Secretary is specifically allowed to share this information with “other Federal law enforcement agencies.” Unless this is changed before the bill passes (if it does, of course), I expect that the conflict between these two requirements will ultimately result in litigation.


Limiting Scope of Regulations


There are three other qualifying statements in this section of the proposed law that are likely to keep lawyers busy for quite some time. Normally I would attempt to paraphrase or explain the wording of legislation, but in this case I think that it is more appropriate that they are quoted verbatim.


“f) RIGHTS AND RESPONSIBILITIES.—Nothing in the section shall be construed to abridge any right or responsibility of a covered individual or covered chemical facility under any other Federal, State, local, or tribal law or collective bargaining agreement.”


“(g) NO PREEMPTION OF FEDERAL OR STATE LAW.—Nothing in this section shall be construed to pre-empt a Federal, State, local, or tribal law that requires criminal history background checks, checks on the authorization of an individual to work in the United States, or other background checks of covered individuals.”


“(j) SAVINGS CLAUSE.—Nothing in this section shall be construed as creating any new right or modifying any existing right of an individual to appeal a determination by the Secretary as a result of a check against a terrorist watch list.”


Taken individually one can see why each was included; someone did not want to stomp on any one of a series of laws or court decisions. Taken together I think that they will ensure that a large number of high-priced lawyers will have a guaranteed income for quite some time to come.


Practical Effects of Regulation


Under the current CFATS regulations a facility could write its background check procedures with a great deal of latitude. Trusted employees that had an unfortunate past could be given a pass as long as it could be justified to a DHS inspector. Of course, less than adequate checks could also result in undesirable employees escaping detection until it was too late.


With the specific rules envisioned in this legislation, fewer companies are probably going to take chances giving an employee a pass, even with employees they know. If one of the disqualifying violations shows up on a background check, the employee is almost certain to be dismissed. Administrative Law Judges are unlikely to veto a dismissal based on an accurate record.


On the flip side there will almost certainly be some jobs that are protected from actions by unscrupulous employers. That is of course, the intent of these provisions and it is certainly an admirable objective. It remains to be seen which result will predominate.

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