Corra Daily Planet » 2011 » January

Supreme Court Upholds Federal Conctractor Employment Screening

Mon, January 31st, 2011 - 6:03 am - By Gordon Basichis

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The United State supreme Court upheld that it is reasonable and contractor for employers to conduct employment screening background checks on anyone working as a federal contractor.  The Court rejected the contention by contractors that asking about their drug usage history or any opened ended background review was intrusive and in violation of their civil rights.   The challenge cam from 28 engineers and scientists at the Jet Propulsion Laboratory, in Pasadena, California.

According to an article in the Washington Post, Justice Samuel A. Alito, Jr. in writing for his colleagues, delivered the following…

“Reasonable investigations of applicants and employees aid the government in ensuring the security of its facilities and in employing a competent, reliable workforce,” Justice Samuel A. Alito Jr.  He said it did not matter whether the workers were employed by the government or were contract workers.

“The government’s interest as ‘proprietor’ in managing its operations . . . does not turn on such formalities,” Alito wrote.

Requiring background checks for federal employees has been mandated since 1953.  Subsequently to 9/11 it was recommended that all federal contractors be subjected to background checks as well.    The main point of contention in the Jet Propulsion Laboratory lawsuit mainly  regarded drug abuse and counseling issues.  The case, formally, is NASA vs Nelson.

According to the Post article….

Justice Antonin Scalia wrote a scathing concurrence in the case’s outcome, joined by Justice Clarence Thomas.

Scalia said it would be “farcical” to believe that “a right deeply rooted in our history and tradition bars the government from ensuring that the Hubble telescope is not used by recovering drug addicts.”

But he and Thomas would have decided the case by declaring flatly that the Constitution does not contain a right to informational privacy, and he castigated the other justices for not examining the question.

I will be curious to see how this decision, if at all, influences the recent lawsuits filed by the EEOC, regarding discrimination and background checks, especially with regard to credit reports.   In its lawsuit, EEOC vs Kaplan, among others cases before the courts at different levels, the EEOC is alleging credit reports discriminates against minorities as minorities tend to have diminished credit scores which hampers their contention as employment candidates.   The EEOC has also contended that criminal records searches, at least where the job applicant must check the box that admits previous conviction, is also discriminatory and lessens the chance of a convict felon being hired.

While this case, NASA vs. Nelson, is obviously different than the other lawsuits, it may still be an indicator of the mood of the courts with respect to the rights of both the employee and the employer.  It will be awhile before we arrive at a clear definition on any changes to employment screening and how background checks can be utilized.

dvertising Agencies Are Linking Employee Pay to Performance

Fri, January 28th, 2011 - 6:37 am - By Gordon Basichis

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As a background checking concern, we have a number of clients in the advertising business.   As such we keep an eye on the industry in general and look for any trends and changes in the overall environment.  We found this story in Advertising Age pretty interesting as it addresses a new means of compensation.   Employees are compensated for their performance.  Or, as one executive puts it, it is good that they have some skin in the game.

This new perspective on employee compensation comes as a result of the Recession. The economic downturn seriously rocked a good many ad agencies as many clients had reduced their advertising to a minimum.   So now as the advertising industry claws its way back from a bad economy the agencies are taking another look at how their employees should be rewarded.

Of course, there is the issue and concern with how exactly to best evaluate employee performance.   Executives are reviewing different metrics, different criteria, but there is no actual reliable standard as of yet.    But as this pay-by-performance model moves forward, it is something worth observing.  It wouldn’t surprise me if other industries instituted similar models.

Meanwhile, check them out before you hire.

When Businesses Relocate, It’s Not Mexico

Thu, January 27th, 2011 - 6:22 am - By Gordon Basichis

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Once upon a pretty short time ago, companies who were thinking of  outsourcing or building  new manufacturing plants considered Mexico a good idea.  And why not?   Labor is inexpensive, the weather is decent, and Mexican workers are diligent and competent.   There are advantages to locating factories in Mexico, thanks in part to the NAFTA agreement.   Mexico gives businesses easy proximity to the United States, so there is a reduction in shipping costs.

But now Mexico is consumed by a series of violent episodes as a result of the drug trade and resultant wars among the rival drug cartels.  Couple that with the Mexican Government’s attempt to crack down on the cartels, and the business climate down there is dicey at best.   With this being the case, according to a recent Wall Street Journal Article, many companies are limiting their investments in Mexico.   In some provinces business investment is way down.

Overall, the drug related strife, replete with murder, extortion, and kidnapping, has cost the Mexican economy upwards of $4 Billion in foreign investments. Executives are reluctant to consider jobs in Mexico.    The latest potential investor to decide to go elsewhere is Swiss Appliance manufacturer, Electrolux AB, who chose Tennessee instead of Mexico  for it its new plant.  Whirpool Corp decided against Mexico and will also install its new oven and cook-top plant in Tennessee.

The glass maker, Owens-Illinois, and heavy equipment manufacturer, Terex Corp.  have put on hold their plans for building new factories in Mexico.  However, other companies like Toyota and snowmobile manufacturer, Polaris, were still moving forward with their investment plans.

I have done a fair amount of research on the drug wars and the Mexican Government’s attempt to reduce the violence and corruption in that country.   To date, some 31,000 people have been murdered.  And then there is robbery, extortion, and kidnapping.  One American executive was kidnapped a few weeks ago.  None of this bodes well for continued investment.

I hate to see Mexico torn asunder by violence and corruption. The domination of the country by drug cartels is anything but good.    But, quite honestly, at the same time with America in an economic downturn,  I am gratified to see that corporations are investing money within the United States and hiring American workers for manufacturing and production jobs.   Considering the Recession and the state of domestic manufacturing, it is time more money was invested here so that new manufacturing plants can be installed and, perhaps, older plant renovated.   Instead of merely paying attention to outsourcing for the cheapest labor dollar, perhaps it is time to reflection long range planning and the repercussions of  chronic unemployment and a paucity of manufacturing right here within our borders.

Yes, labor may be more costly, but shipping is less, and if stability is a factor then few nations are as stable as conditions here.   Besides, if you want Americans to be able to buy the goods being manufactured, then it is necessary to provide jobs.

Sometimes, as evidenced by this situation in Mexico, things happen for reasons no one can ever predict.

Employee Theft Increasing Making Employment Screening Necessary

Wed, January 26th, 2011 - 6:14 am - By Gordon Basichis

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Production may be down, sales might be down, jobs may be scarce, but employee theft is on the rise.  According to,  Law enforcement authorities in Panama City, Florida are investigating the theft of nearly $14,000 in deposits.   The company where the funds were allegedly stolen, Amerigas, discovered the theft during a periodic audit.

The suspect, a former employee, no surprise there, had been fired some two years ago.   As only $2,000 of the stolen funds was in cash, and the rest in checks, it is possible to recover some of the missing funds.   First it is incumbent to find the suspect.   Sometimes that is easy and often they have taken off for different climes.

Does this happen much?  Indeed. As I said it is on the increase and worried employer are conducting a greater number of background checks to filter their job applicants.  Needless to say, having money or sensitive proprietary data stolen is embarrassing and often very costly.   It doesn’t do wonders for morale, either.

Check them out before you hire.

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