If my company is a subcontractor, can the business that we work for order us to get background checks on our employees?

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If my company is a subcontractor, can the business that we work for order us to get background checks on our employees?

I am a VP of a small business. We have been working as a subcontractor for a larger company for the last 3 months and have another 12 months to go on the project. This week they informed us that all of our employees have to complete forms authorizing background checks and provide front and back copies of their ss cards and driver’s licenses. The forms are “Release Authorizations” and the first paragraph reads, “In connection with my application for employment, I understand that a consumer report may be requested and may include information as to my character, work habits, credit, academic credential verification, job performance, experience and reason for termination”. Is this legal? My employees are not their employees.

Asked on July 18, 2013 under Business Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

It's legal if you want to work for them: they have a right to only hire or retain subcontractors who comply with their wishes, such as their desire to get background checks of all the subcontractors employees. So while they can't "force" you to do this in the sense of bringing a legal action, etc. to make you do it, they could refuse to renew contracts, give you additional work, hire you in the future, etc. if you won't comply.


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