Managing Human Resources, Eight Edition

 You Manage It! 2: Ethics/Social Responsibility Background Checks Can Misfire, Harming Employees’ Career Prospects

Theodore Pendergrass was shocked in November 2006 when the Walgreens pharmacy chain rejected his application for a store supervisor job. The company told him that a background-screening firm called ChoicePoint reported that a past employer had accused him of “cash register fraud and theft of merchandise” totaling $7,313. “I wanted to cry,” Pendergrass said.

The $4 billion background-screening business is booming. Companies large and small are sorting mostly mid- and lower-level job applicants based on information compiled by ChoicePoint, ...