Credit Checks Prohibited in Oregon

March, 2010

The Oregon legislature has passed a bill, SB 1045, prohibiting employers from using credit histories for any employment purposes including hiring, discharge, promotion and compensation. Governor Kulongoski is expected to sign the bill into law effective July 1, 2010. If an employer engages in this unlawful employment practice, the aggrieved employee could either file a complaint with the Bureau of Labor and Industries (BOLI) or file a civil lawsuit for injunctive relief, reinstatement or back pay, and attorney's fees.

The new law will have some narrow exceptions for industries that are required by state and federal law to use credit histories for employment purposes, such as banks, credit unions, and public safety. Exceptions will also be made where credit history is "substantially job-related." The use of the credit check must be disclosed in writing. The bill does not give any guidance on what it means for a credit check to be "substantially job-related," but we're assuming that courts will construe that requirement very narrowly.

Oregon employers who are currently using credit checks must ensure they fit into one of the exceptions or cease the practice by July 1 of this year.


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