Friday, October 7, 2016


Employers can do a myriad of different checks on potential or current employees, and one of them is a credit check. But, Illinois restricts certain background checks when it comes to employment screening practices. Restrictions on a popular background check, a credit report, was recently discussed by the Illinois Appellate Court in Ohle v. The Neiman Marcus Group

In Ohle, the Plaintiff initially received a conditional offer of employment for a sales associate position in the Defendant’s Oak Brook store. The final offer was contingent on passing a background check, including a credit check which Plaintiff failed because of a record of civil judgments and accounts in collections. Plaintiff claimed that in performing the credit check that Neiman Marcus violated Illinois Employee Credit Privacy Act.

In addition to the restriction in the Fair Credit Reporting Act,  The Illinois Act restricts the use of credit information in the hiring process unless the circumstances fall into one of the following seven exceptions:

A satisfactory credit history is not a bona fide occupational requirement unless at least one of the following circumstances is present:

(1) State or federal law requires bonding or other security covering an individual holding the position.

(2) The duties of the position include custody of or unsupervised access to cash or marketable assets valued at $2,500 or more.

(3) The duties of the position include signatory power over business assets of $100 or more per transaction.

(4) The position is a managerial position which involves setting the direction or control of the business.

(5) The position involves access to personal or confidential information, financial information, trade secrets, or State or national security information.

(6) The position meets criteria in administrative rules, if any, that the U.S. Department of Labor or the Illinois Department of Labor has promulgated to establish the circumstances in which a credit history is a bona fide occupational requirement.

(7) The employee's or applicant's credit history is otherwise required by or exempt under federal or State law. 

Neiman Marcus argued that Plaintiff’s position as a sales associate would allow access to credit card information, putting the Plaintiff in an exempt occupation under the Act, and allowing them to consider credit history in their hiring process. Defendant also argued they were exempt from the Employee Credit Privacy Act because of Plaintiff’s access to cash and signatory power. 

The lower court sided with Neiman Marcus but the Appellate court thought otherwise. The Appellate court found the employee did not have access to confidential credit card information by just taking credit card applications. Rather, it found that sales associates just accepted credit applications which might contain confidential information such as social security numbers, but would just put them in the drawer to be processed by managers. The court found this did not amount to “access” as contemplated by the Act. Moreover, the court found that a contrary ruling, like that of the lower court, would lead to the result that most if not all sales associates would fall under an exception to the rule in the Act, thereby having the “exception swallow the rule” contrary to the intent of the legislature in approving the Act.

Employers must take note of this Act, along with federal law on use of credit reports. Denial of employment based on a candidate’s credit report will likely draw careful review by the court and a narrow application of the state’s Act.