Why every AG in the country should be suing the credit-rating agencies

[Snoutport]

most excellent reading: http://slacktivist.typepad.com/slacktivist/2010/07/why-every-ag-in-the-country-should-be-suing-the-creditrating-agencies.html

Years ago, when I applied for my first teaching job I was told I had to sign permission for them to do a credit report. I refused, took it to the Union, faced the onslought and won. It came down to this: unless EVERY employee had to do one, they could not make just the new hires do it. They were not allowed to have info on one set of employees but not all of them since the credit report would be used to: "make hiring and firing decisions".

But the firing part should instill fear in all employees. Late on your sears card payment? grounds for termination...you've shown you aren't of good moral standing.

[happyslug]

1. But being late on your Sears bill, is NOT "Good Cause" to be denied Unemployment

Most employers are worried about paying increase unemployment tax then anything else. You have to remember employers are taxed for unemployment. The federal government taxes employers at a set rate to set up the unemployment system AND to set up a reserve if and when it is needed. The State then must pass an unemployment tax to pay for ongoing claims (This is a FEDERAL REQUIREMENT). Now, as part of the Federal Act, the States can reduce any unemployment tax an employer pays based on that employer's history of laying people off without good cause. The less you lay off, the less unemployment tax you pay (Some employers pay no tax, just reimburse the state if any ex-employees make a claim, almost none do in regard to those employers).

Notice, the tax is reduced if the employer does NOT lay anyone off EXCEPT for "good cause". What is "Good Cause"? Something that the employee does that harms the employer, getting in fights, arguing with the employer, quitting without just cause (An employee can quit and get unemployment, but the employee must show he or she had JUST CAUSE to quit, a very difficult burden of proof), missing work without just cause (sick days are NOT "Just Cause" but calling off work, just to be off work is never "Just Cause" to call off work), Jury Duty (and otherwise illegal, but I am staying with unemployment law), racial and sexual discrimination (Again illegal otherwise) etc.

Now, employers are NOT responsible for employees for the employee first 90 days of employment. This was do to the fact that when unemployment insurance first came into use, it was the 1930s and electronic computers were a decade away (and 2-3 decades away from use in unemployment offices). Thus using manual methods it was determined the unemployment office could only rely on data from employment for the period 90 days prior to an employee's termination. Thus unemployment offices adopted the 90 day rule (and employers used that 90 day period as an employee's probationary period, if the employee was fired during that 90 days, the hiring employer was NOT responsible for the employee's unemployment, the employee's previous employer was). Yes, the 90 day probationary period most people get is do to the lack of Computers in the 1930s.

I bring all of this up for Credit Scores may have some value when hiring an employee (Very little Value, but it is a way to eliminate potential employees) but is useless for present employees, for such the employer of such employees would be laughed out of court if they would show up in an unemployment hearing and said that a bad credit score was "just cause" to terminate an employee. The hearing officer will ask how is that job related, and when the employer can not say the employer will lose the unemployment case.

Just a comment of WHY a credit report is useless in regard to present employees. Is paying increase unemployment taxes worth firing someone with a bad credit score? The answer is no, so it is not done,

As to the State Attorney Generals taking on this type of case, the problem you have is finding a person who was discriminated against by this policy. You need to have someone who was discriminated against AND that the employer admits would have been hired except for the low credit score. As to the later, most employers will NEVER say the low credit score was the reason to hire another, they will just point out they preferred someone else for they thought the person hired was a better fit into their organization.

if you someone get an employer to say it relied solely on the Credit Score, you then have to find someone who the employer failed to hire for that reason. When the Americans With Disability Act (ADA) was passed, it was believed that the greatest use of the ADA would be to end discrimination in hiring the disabled. In fact, it quickly was found that the main people protected by the ADA was NOT people looking for work, but people already working. The reason for this was simple, people who are looking for a job, never hold out for one job, they keep on looking, they have no financial interest in any one potential employer. On the other hand existing employees do have a financial interest in their current employer and thus willing to go to court to protect their job. Thus the ADA ended up helping more people keep their jobs then it did getting disabled people working. The same with the lawsuit you suggest, most unemployed people will just waive off the denial of a job and go to another interview, writing off the denial to the employer preferring someone else. It is Current employees who see the discrimination first hand and thus will seek protection under the ADA and any action by the State Attorney Generals.

[Snoutport]

2. wow slug--good info!

:0) I stood my ground and didn't sign it but most everyone else did. :0(

[Mnemosyne]

3. K&R n/t