A $93,000 Reminder: Why the Fair Chance Process Matters

Every hiring manager knows the feeling. You’ve interviewed a strong candidate, made a conditional offer, and then the background check comes back with something on it. The instinct is to pull the offer and move on.

In California, acting on that instinct without following the process can be very expensive. The City of Signal Hill in Los Angeles County just learned that lesson to the tune of $93,000.

What Happened in Signal Hill

As reported by Kim Gusman of the California Employers Association, an applicant for a water systems operator role in the city’s Public Works Department made it through multiple rounds of interviews and received a conditional job offer. After the background check, the city rescinded the offer.

According to the complaint filed with the California Civil Rights Department (CRD), the city did not complete the individualized assessment required under the Fair Chance Act. The applicant also said the city ignored information they provided disputing the accuracy of the report, and that the conviction was more than seven years old with no connection to the job.

The matter was resolved through mediation. Without admitting wrongdoing, the city agreed to pay $93,000 to the applicant and to:

• Revise its hiring policies
• Update its notices to applicants
• Train staff on Fair Chance Act requirements
• Report every job denial tied to criminal history to the CRD for one year

That last item is the one that should get every employer’s attention. A year of reporting to a state agency is a lot of extra work and a lot of extra scrutiny.

The Process California Requires

The Fair Chance Act applies to California employers with five or more employees. The law is not new. It has been in place for private employers since 2018, and the steps are clear. Here is what the CRD expects before an offer can be withdrawn because of conviction history.

• Wait until after the conditional offer. You cannot ask about or consider conviction history before a conditional offer is made.
• Complete an individualized assessment. Ask whether this specific conviction has a direct and adverse relationship to the duties of this specific job. Consider the nature and gravity of the offense, how much time has passed, the duties of the role, and any evidence of rehabilitation. A blanket rule like “we do not hire anyone with a DUI” does not meet the standard. Document your assessment in writing.
• Send a written preliminary notice. Tell the applicant which conviction(s) are the basis for your preliminary decision, include a copy of the conviction history report if you obtained one, and explain their right to respond.
• Give the applicant time to respond. The applicant has at least five business days to respond. If they let you know within that window that they are disputing the accuracy of the report, they get an additional five business days. Their response may include evidence the report is wrong, proof of rehabilitation, work history, education, or other context.
• Actually consider the response. This is where Signal Hill reportedly fell short. Information the applicant submits has to be reviewed and weighed, not set aside.
• Send a written final notice. If you still decide to rescind, the final notice must state the decision, any internal process the applicant can use to challenge it, and their right to file a complaint with the CRD.

Practically speaking, plan for roughly two weeks between the preliminary notice and a final decision, and keep your timeline documented. Also keep in mind that some cities and counties, including Los Angeles County, San Francisco, and San Diego County, have their own fair chance ordinances that add steps on top of state law.

Why Following the Process Protects You

The process is not just a legal box to check. It protects your organization in three real ways.

It keeps good people in your pipeline. A conviction from years ago often has nothing to do with whether someone can do the job well. The assessment gives you a structured way to see that.

It catches report errors. Background reports are not always perfect. Records get mismatched, outdated, or misreported. Giving the applicant a chance to respond is how those errors come to light before you make a costly decision.

It creates your paper trail. If a decision is ever challenged, a documented assessment and properly timed notices are your best defense. Without them, you are explaining a gut call to a state agency.

The Right Screening Partner Makes a Difference

The best way to stay compliant is to start with a background screening partner who understands California law. For us, that partner is Private Eyes Screening Group, led by founder and CEO Sandra James.

Sandra and her team are a reliable, reputable, and trusted partner of ours, and we encourage any employer using background checks to check them out. Private Eyes delivers fast, accurate reports, and their people are responsive and genuinely helpful when you have a question about a report or your process. That kind of service matters when you are working through a Fair Chance timeline and need clear answers quickly.

If you are hiring, a partner like Private Eyes gives you the accurate information you need, so you have the time and clarity to follow each step of the Fair Chance process the right way. Visit Private Eyes Screening Group to learn more.

Let’s Talk

At Dynamic, we help employers hire well and hire compliantly, whether through direct hire search, temp-to-hire, or temporary staffing. If you would like help reviewing your background check and offer process, or an introduction to Sandra and the Private Eyes team, reach out to us at 925-855-3600 and we would be happy to connect you.

This post is for general information and is not legal advice. We encourage everyone to consult their own employment counsel about specific situations.