Blacklist awaits retail workers accused of theft

Employees don't have to steal a dime for their records to be permanently tarred in databases used by Target, CVS and other stores.

By Jason Notte Apr 4, 2013 7:03AM

Cash registerHow do you keep nearly 8 million workers in constant fear of losing their jobs without actually threatening to lay off any of them? Just assure them that if they're accused of stealing at your store, they'll never work in retail again -- ever.


Note the wording of that last sentence and let that sink in a second: Accused of stealing. As The New York Times reports, an employee doesn't have to take a dime while working in stores like Target (TGT), Rite Aid (RAD), CVS (CVS), Family Dollar (FDO) and others in First Advantage Corp.'s Esteem database. Just a vague hint on the employee's electronic record showing that he or she had merchandise go missing during a shift or a poorly phrased written statement submitted after a sit-down with store security officers could permanently tar an employee's record.


In the case of one former Forman Mills employee quoted by the Times, all it takes is a suspected theft of less than $35 to brand a worker for life.


Retailers have very little tolerance for employee theft, which accounted for 44% of all store thefts in 2011, or $15 billion in lost merchandise, according to retail trade group The National Retail Federation. However, lawmakers and regulators are growing increasingly impatient with retail databases' low bar for blacklisting and store security officers' methods of coercing what sounds like a confession out of otherwise innocent employees -- a move that would cause a great deal of trouble for a law enforcement official attempting the same.


Since the recession, lawsuits have mounted against companies like GIS, HireRight and LexisNexis (ENL) that run or once ran retail employee databases. The Federal Trade Commission (FTC) also has received myriad complaints about the databases and is examining whether they comply with the Fair Credit Reporting Act, which combats inaccurate consumer information and gives consumers more control over their personal data.


Last summer, the FTC settled charges with HireRight over accusations that its retail-theft database contained inaccurate records and that HireRight made it too difficult for those accused to dispute claims. LexisNexis agreed last week to pay $13.5 million to settle a class-action lawsuit on behalf of 31,000 people that accused the firm of violating consumer protection laws by selling background checks to debt collectors. The company did not admit wrongdoing but ceased its ownership of the Esteem database this year.


Though the National Retail Federation says nearly all retailers perform background checks while hiring, it fails to mention that even episodes of suspected shoplifting make it into employees' records and become red flags to potential employers.


As the databases draw increasing fire, retailers are starting to back off a bit. Home Depot (HD), for example, dropped the Esteem database this year after a review of "systems and services."

More on moneyNOW

Apr 4, 2013 9:45AM
Sounds like a good idea for  lawmakers in congress. Nearly 535 people would be forced to resign and could not steal, I mean work in government ever again. Of course they would go work for lobbyists and really make their millions.   
Apr 4, 2013 9:42AM
I guess it's time to shut down those monsters and destroy the idea that one can be "accused" and be ruined. There is no aspect of AMERICAN in that, its purely Nazi.
Apr 4, 2013 9:52AM
This just seems fishy.  Heck, as an employer, you're not supposed to say anything about a previous employee other than to verify their past employment and state whether or not they are eligible for re-hire.
Apr 4, 2013 12:30PM
Retailers are mostly bottom feeders to begin with and to smear employees with a no hire database is a slap in the face. Some good class action lawsuits are due here.
Apr 4, 2013 9:43AM
By the way... some New World Order obeying Law Firm had to write that legalese. Any reason why we wouldn't skip the trial and go right to the hanging based on the same premise? What goes around comes around, especially for unethical clowns.
Apr 4, 2013 11:39AM

HR people are not supposed to say anything negative about a former employee, but

of course they do.How do you prove it?I`ve never heard of a HR person being sued.

Sep 10, 2013 2:26PM
I have a feeling my former DM is using this as a spite tool.  She frequently mentions ESTEEM as a means of keeping employees in line.  I have NEVER stolen a thing in my life but since I walked out due to her abusive and unprofessional personality I haven't gotten even a call for an interview in jobs that would normally be calling right away.  I know the job market is tight, but I have been head hunted and had the pick of positions in the past.  All of a sudden...nothing?
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