Written Testimony Submitted by
Deborah Greenfield and Damon Silvers
Associate General Counsels of
The American Federation of Labor and Congress of Industrial Organizations
To
the House Subcommittee on Financial Institutions and Consumer Credit of the House
Banking and Financial Services Committee
Hearing on
The Effect of the Fair Credit Reporting Act
On Employer Investigations of Employee Misconduct
May 4, 2000

The labor movement strongly supports the use of third party investigators by employers in the context of allegations of sexual of other discriminatory harassment or employment discrimination by individual managers. It is often the case that third party investigators are the only avenue through which an organization can discover the truth about conduct by persons in positions of authority within that organization.

The AFL-CIO believes that this Subcommittee should seek to address the obstacles that the Fair Credit Reporting Act places in the way of responsible third party investigations but also preserve both the rights the Act guarantees to all consumers and certain specific rights the Act seeks to provide to employee targets of their party investigations. We agree with the Equal Employment Opportunity Commission that full application of the FCRA in its current form to investigations of discrimination under Title VII has a chilling effect of statutory enforcement. We do not, however, favor either a broad exemption for employment related investigations or a complete exemption from all requirements of the Act for Title VII-related investigations.

H.R. 3408, the Fair Credit Reporting Act Amendments of 1999, is neither narrowly crafter nor does it provide meaningful protection to employees facing third party investigations in the workplace. While we are not entirely satisfied with the details of the Federal Trade Commission approach in its letters to the Committee, we believe the agency's basic philosophy of maintain some FCRA protections for employee targets of third party investigations is sound. Again, while we differ on a number of important specifics, we believe that philosophical approach is shared by the Society of Human Resource Management and other employer groups that have been working on this issue.

Unfortunately, some employers use investigations as a surveillance tool to deter employees from exercising their rights in the workplace, including enforcing laws such as the Fair Labor Standards Act, and from exercising their rights under the National Labor Relations Act to organize unions. As others have noted, investigations themselves can contribute to workplace discrimination against non-traditional supervisors, or they can be a means by which employers pursue personal vendettas or seek to obtain private information about their employees in general. At the time of the passage of the FCRA, much of the focus in the press was on abusive investigative practices undertaken by Delta Airlines, a largely non-union airline, in interviewing former Pan Am flight attendants who had bee unions members for jobs after Delta bought Pan Am's routes.

Under the pretext of investigating allegations or suspicions of theft, product tampering, drug use, racial or sexual harassment, and other illegal conduct, third party investigators gain access to a wide range of information about workers. Some investigations focus on particular individuals. Others cast a much broader net under the guise of enforcing anti-theft or anti-drug policies. Regardless of which type of investigation an employer conducts, much of the information gathered remains unverified, and much of it is the product of coercive and deceptive techniques.

Improper third party investigators present a particular threat to workers' rights that is significantly greater than that posed by employer investigations. Professional investigators are adept at mining that wealth of information available on the Internet that can be obtained on individuals. They have the resources and expertise to conduct wide ranging interviews outside the workplace that lie beyond the capabilities of the typical employer. They often have operatives trained to pose as employees for the purpose of collecting information from other employees. They have access to surveillance technology that the typical employer does not have. It is entirely appropriate that the FCRA seeks to provide certain protections for consumers in as well as out of the workplace against the abuse of these formidable tools.

Many union contracts do provide protections to employees in the form of just cause clauses, arbitrations of disputes, and other protections against adverse action. But the vast majority of the workforce does not enjoy those protections, including by definition any employee seeking to organize a union. Of course, even a union contract provides limited protection against intrusive surveillance about with the employee and her union are unaware.

Among the specific incidents involving improper investigations that the ALF-CIO is aware of are (1) a major employer who hired a private investigator to pose as an employee during an organizing drive, ostensibly to investigate drug use, but who submitted extensive reports on attitudes toward the union among specific employees; (2) a major employer whose supervisors called in union activists during an organizing effort, read to them from their credit reports, and queried them as to why someone with so many debts would undertake something so risky as getting involved with a union; (3) a food distribution company, whose workers were organizing a union, which responded to an employee's discovery of a rodent's nest in a box of the company's products by conducting an investigation into alleged product tampering, which led to the employer disciplining one union activist and threatening an entire department with layoff; the Food and Drug Administration conducted an investigation and found no evidence of tampering and the National Labor Relations Board has issued a complain charging that the discipline and threats were part of an unlawful effort to intimidate employees who were involved in forming a union.

The AFL-CIO believes that what is unusual about these incidents is not that they happened, but that they came to light. While we do not wish to suggest that the majority of employer investigations are improperly motivated, we believe the conduct is sufficiently widespread that workers need certain basic protections when they are the subject of third party investigations. Because employees in the typical case are completely unaware they have been the target of an improper investigation, requirements of good faith or the production at the request of the employee of "summaries" (proposals for which are vague as to their content) are not meaningful safeguards.

Nonetheless, we believe that the chilling effect of the FCRA on Title VII investigations can be mitigated while leaving in place the necessary protections for employees. Application of the FCRA to such pretextual investigations can deter or even cure this type of investigation, particularly through the statute's notice provisions. Indeed, absent the type of notice provided under the FCRA, the typical pretextual investigation may never come to the attention of the affected employee, but the information gained thereby will arm the employer with powerful weapons to interfere with workers' protected rights.

Notice and a meaningful summary of the investigation to the employee target should be required to all third party investigations, whether they lead to adverse action or not. Such notice should be made in a timely enough fashion that the employee can act to protect her privacy or enforce her rights. Notice to the employee need not name witnesses, involve other information that would compromise the ability of the employer to conduct the investigation, or be made prior to the investigation's commencement.

We also believe that any solution should craft substantive protections guaranteeing employees some level of accuracy and care in third party investigations, as the FCRA does now. We believe such protections can be crafted so as not to deter employers from the responsible use of investigators in cases of harassment and discrimination.

In addition, the AFL-CIO favors an amendment that only carves a narrow exemption from the more onerous aspects of the FCRA for third party investigations conducted pursuant to an employer's obligations under Title VII and other statues that explicitly mandate a third party investigation into employee misconduct. With respect to this second category, we believe it is important to specify the precise statues at issue. We think it is very difficult, if not impossible, to craft "generic" language that captures only this narrow class of investigations.

The AFL-CIO believes that working together all the interested parties to this matter can arrive at a solution that allows responsible employers to use professional investigators to comply with their obligations to prevent workplace harassment and discrimination and protects employees against abusive and intrusive investigations. We have been involved in preliminary discussions with representatives of employers, investigative firm, civil rights, and consumer groups. Those discussions, while at an early stage, appear to us to have a good chance to leading to a broad consensus as to how Congress might best proceed in this matter.

In conclusion, the AFL-CIO would like to thank the Chair for allowing us the opportunity to contribute to the written record of this hearing, and we look forward to working with the Subcommittee to address the important issues posed by the confluence of the FCRA and our civil rights laws.

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