Post Employment Adverse Information

Case Study Brief #8

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Adverse Information


Management made a job offer to a candidate for a vacant mid-level management position. The candidate accepted the offer and subsequently resigned his position one-week before his start date with the new company. Two days before the candidate’s start date, an HR manager was contacted by a business acquaintance that was employed with a recruiting firm. The acquaintance told the HR manager that the candidate was facing a sexual harassment complaint at his former employer’s business. The candidate’s former employer is also a recruiting firm and a major competitor of the acquaintance.


An investigation found the allegations to be true. This information did not surface earlier due to the former employer’s concern about liability. The information was learned by the acquaintance of the HR manager through industry gossip. The verification of the information by the company was made through legal means based on the original source to HR.


What should the company do?

Final Case Study


As your final project for the class, each of you will receive a case study brief involving an incident with the potential for employee discipline and some type of liability exposure to your company.  You should identify all potential employment related liability issues in your brief, thoroughly research and discuss these, determine the various steps the company could take and make a recommendation to management on how to proceed detailing the potential outcomes of your recommendation.  Your paper should be written from the perspective of an HR director providing advice to senior management

The briefs are straightforward.  If an employee is not identified as a protected class, they are not.  You should assume that your employer has policies prohibiting sexual harassment, drug and alcohol abuse and workplace violence and subscribes to “best practices” regarding all forms of illegal workplace discrimination.  Your company also has a progressive disciplinary procedure.  As you read your brief (which you should do many times) you should enumerate all potential discrimination issues as well as any ADA, FMLA, substance abuse issues and so on.  Do not forget such issues as employment-at-will, just cause, wrongful or constructive discharge, and negligent hiring and/or retention.


As you identify potential liability issues, your paper should provide a discussion on the source of the protection or liability created by the law.  You should also discuss how the issue does or does not apply in these circumstances and your insight on how it might affect the company.


As you form your recommendation to management remember we do not live in a black and white world.  You need to balance potential liability to the organization with the impact each option you identify will have on other employees and the organization itself.  This may include employee relations/morale issues as well as public relations concerns.  Your recommendation to management should include a defense of your position.


Topics to cover – Outline


Did the investigation reveal the claims of sexual harassment is substantiated?

  • If hewas not charged, then it is obvious that he may just be innocent, and the past employer could not find cause to terminate him for sexual harassment.
  • Get the applicant side of the story, the former employer and possible the victim
  • Protected class


  • men accused of sexual harassment allege they were unfairly stereotyped and disbelieved because they are men.
  • When the HR manager became aware of the claim, there should have been some communication with the applicant requesting for a background check.
  • The company should have stipulated on the application form that any offer of employment is contingent on acceptable outcomes of such tests and inquiries.
  • The applicant would not have put in the resignation until his background check came back. The applicant now will not be able to return to his former employer and may now be disqualified for unemployment compensation.
    • Fair Credit Reporting Act states employers must notify the applicant that a background check is being conducted
    • Applicant can request copy of background check
    • Pre-Adverse Action Notice: Informs the candidate that you are considering not moving forward with the employment process based on information in the background report.
    • Waiting Period: The FCRA requires a reasonable amount of time (usually 7 calendar days, but some jurisdictions require more) before taking final action, so the candidate has an opportunity to dispute any incorrect or outdated information in the report.
    • Adverse Action Notice (or “Post-Adverse Action Notice”): Once you have waited the required amount of time – including time required for the resolution of any dispute – you must provide a final notice of your decision if you have decided not to move forward with the candidate.
  • Interference with future employment opportunities
    • the job offer was withdrawn because of thesexual harassment legal claims at former employer through gossip. Information was shared by a third party; applicant employer is a competitor. Even though the information was obtained through legal means, there was a bad reference provided. The former company could potentially get sued because of the employee’s actions.
    • courts have routinely recognized as retaliatory, such as providing a negative reference, refusing to provide a reference, or blacklisting a former employee by sullying their reputation within their industry.


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