Background Checks: BMW Case is a Cautionary Tale

Pre-employment screening can provide a critical level of protection for organizations. Obviously, any business owner wants to weed out potential “bad actors” before they end up on their staff roster. When it comes to screening existing employees, however, there are important considerations and legal implications that need to be addressed. It is a lesson that revered German automaker BMW is learning the hard way, and other business leaders should be aware of the consequences.

BMW finds itself having to pay a $1.6 million settlement in a race discrimination suit that stems from performing background checks on current (at the time) employees. As detailed in Human Resource Executive Online, here is what happened:

In the summer of 2008, BMW switched contractors handling the company's logistics at its Spartanburg, S.C., production facility, and required the new contractor to perform criminal background checks on all existing logistics employees who re-applied to keep their jobs. At the time, BMW's guidelines regarding criminal convictions excluded individuals with convictions in certain categories of crime from employment, regardless of how old the conviction, or whether it was classified as a felony or misdemeanor.

So, the reader might wonder, where was the fault in their process? The article goes on to explain the point at which things became problematic:

In the suit, the EEOC alleged that BMW discriminated against a group of African-American logistics workers when the new contractor excluded these employees at a disproportionate rate after performing criminal background checks and learning that roughly 100 of these incumbent workers did not pass the screen. According to the EEOC, 80 percent of the existing employees who were subsequently disqualified from employment -- some of whom had worked there for several years -- were black.

By implementing their screening, and then sticking firm to employment policies with either an ignorance or a disregard for what could appear to be racial profiling, BMW opened itself to the lawsuit that led to the $1.6 million settlement. While $1.6 million won’t break the bank, by any means, for a large automaker, it probably more than offsets any trivial gain BMW hoped to achieve by protecting itself from potential worker misconduct or potential fraud, whichever may be the case.

As the article notes:

As evidenced by this settlement, conducting criminal background screens on existing employees seems to be a risky and potentially costly proposition.

The BMW case shows this to be true, but even more so, the decisions made based upon the information provided from background checks are where the risk and cost ultimately lay. At CRI Group, we excel at providing every level of background screening in all parts of the world. Our screening agents are in countries and locations that other networks don’t reach.

The reason? Business leaders need information in order to make the right decisions – about their businesses, their employees and their partners. However, after receiving information from background screening, executives and human resources professionals must make reasoned and careful decisions on personnel rather than following strict, sweeping policies.

If the BMW employees had been reviewed on a case-by-case basis, it stands to reason that many of them would be seen as valuable in their jobs, and without conduct violations or any recent legal problems, there would be little risk – and more reward – in keeping them in their positions. One should not seek to remove skilled and qualified workers based on inflexible policies that don’t serve the company.

The message from the BMW case should not be, “avoid performing background checks on current employees.” Instead, it should be emphasized that background screening is important, and should be used as part of an overall review process that weighs an employee’s performance, conduct, trustworthiness and tenure at the company.

If BMW had followed such a reasonable path, they would be able to keep the $1.6 million … and some longtime employees.