One More New Rule – This Time It’s Information Disposal

Kegler Brown E-mployment Alert

The Federal Trade Commission has issued new rules that impact employers. The rules are effective today, June 1, 2005.

The rule concerns disposal of consumer reports. Consumer information includes any reports that are provided to an employer from a third party reporting agency regarding background checks on prospective, current, or former employees. (This would include criminal records checks, credit checks, driving records, etc.)

The rule requires employers to "take reasonable measures" to protect against unauthorized access to or use of the consumer information "in connection with its disposal." The intent is to protect against identity theft of consumer information while it is stored or discarded. No specific procedures are required by the rule. However, the FTC suggests measures such as (a) adopting rules requiring destruction of consumer information (b) adopting rules governing eradication of electronic data, and (c) hiring qualified outside contractors to dispose of consumer information.

If you have an established policy regarding record retention and destruction, these new requirements should be added to your policy.