March 12, 2000, The Wall Street Journal
(Copyright (c) 2002, Dow Jones & Company, Inc.)

Zero Tolerance: Employers Dig Deep Into Workers' Pasts, Citing Terrorism Fears --- Lilly Bans Contract Staffers For Old Petty Crimes; The $60 Bounced Check --- A Case of Mistaken Identity

By Ann Davis, Staff Reporter of The Wall Street Journal

INDIANAPOLIS -- After Sept. 11, Kimberly Kelly says, she got a lump in her throat each morning as "The Star-Spangled Banner" blared at the Eli Lilly & Co. plant where she worked as a pipe insulator.

But on Jan. 29, her supervisor informed her that the drug giant, after conducting a criminal-background check as part of new post-attack security measures, had decided to ban her and several other contract workers from its facilities.

Her crime? In 2000, the 46-year-old single mother bounced a $60 check to a refrigerator-rental company. Ms. Kelly, who was going through a divorce at the time, says she moved to a new town and closed her bank account without realizing the check hadn't cleared. Court records in Montgomery County, Ind., show that when the appliance company couldn't locate her, it pressed charges. A judge found her guilty of check deception, a misdemeanor, and ordered her to pay $179 in fines and court costs.

"I never would have thought a $60 bounced check would cost me my job," says Ms. Kelly. After being escorted off Lilly premises, she says, all she could think about were the times she was asked because of her small size to crawl into dank spaces to work on decaying pipes. "It can be grubby and dangerous, but it was my job. And I loved my job. I wish I had it back."

Since Sept. 11, Lilly has commissioned criminal-background checks of more than 7,000 employees of outside vendors, mostly construction workers and food-service staffers, people familiar with the matter say. Lilly required the workers to consent to the screenings as a condition of entering its property. "If I refuse," say waivers signed by the employees, "my assignment at Lilly will end."

Union officials say Lilly has since banned at least 100 contract workers from its premises. Some of those were found to have committed felonies, including burglary. But union officials say a great many were guilty of nothing but misdemeanors, the lowest category of crime. On the day Ms. Kelly was banished, four of her roughly 25 co-workers suffered the same fate. One was arrested 6 1/2 years ago on a misdemeanor battery charge that had since been dismissed and he thought had been expunged. Another had been fined $250 and served 20 hours of community service 14 1/2 years ago for misdemeanor marijuana possession.

Lilly spokeswoman Joan Todd calls the bans a "direct response to the 9/11 attacks" and says the company is "doing what we must do to protect our company, our people, our assets and our products." The company won't comment on individual workers' cases or say whether it plans to rescreen any of its own 36,000 employees. Nor would it discuss the criteria used to determine which of the outside workers it bans.

"We've been consistent in our application of the criteria," says Ms. Todd. "I don't expect that everyone will like that."

Similar purges have taken place around the country in the months since Sept. 11. Citing the risk of potential saboteurs in their ranks, companies have commissioned an unprecedented number of criminal-background checks of existing employees.

"Businesses have learned since the 11th there's a lot of inherent danger in not knowing who works for you," says James Lee, spokesman for ChoicePoint Inc., an Alpharetta, Ga., data-collection firm spun off from credit-bureau giant Equifax Inc. ChoicePoint, which in November launched a private database service offering multistate criminal-history checks, says the monthly volume of checks soared from 3,000 that first month to nearly 25,000 this February. ChoicePoint is performing Lilly's checks.

Security experts say the biggest change has come from companies double-checking the backgrounds of outside vendors that come onto their property. Such workers are more likely to draw scrutiny because they aren't as well-known to companies as internal employees. Contract employees also have less legal recourse to fight back.

The National Basketball Association required food and merchandise vendors to submit names of their employees for criminal checks in advance of this year's All-Star game. Two major movie studios have retained security firm Kroll Inc. to help them certify that tens of thousands of employees of their outside vendors such as caterers, mechanics and medics don't have criminal records. As of this month, Kroll says background checks are running about 20% higher compared with a year earlier.

Clarian Health Partners, one of the largest hospital operators in Indiana, has started telling contractors at its facilities that it will begin verifying that their workers have passed criminal checks. The U.S. pharmaceuticals unit of Bayer AG says it is ramping up vendor screening and is discussing a new round of checks on its own employees.

The heightened security concerns, coupled with the emergence of vast new electronic databases, raise difficult questions about privacy and fairness in the workplace. While few would argue with a company's right to ban dangerous felons from the job site, the calculus becomes much tougher when it comes to people who have committed only minor offenses and paid their debt to society.

"There are millions of people in America who have done something illegal at some point in their lives," says Lewis Maltby, president of the National Workrights Institute, a nonprofit research organization in Princeton, N.J. "It's unfair to deny someone a job or destroy their career because of something they did 10 years ago that wasn't job-related to begin with."

Especially in industries not traditionally considered terrorist targets, the criteria for dubbing someone a "security risk" can vary widely. Lilly, for example, has refused to allow some construction workers on its property who had previously passed extensive criminal, psychological and financial screenings for projects at nuclear-power plants. It is also excluding workers for crimes that wouldn't necessarily bar them from airlines. Under a newly revised federal law, the only automatic disqualifications for airline workers with access to tarmacs are felony convictions such as armed robbery, drug dealing, burglary, espionage and willful destruction of property.

Lilly implemented its policy soon after the September terror attacks. Citing "the need for enhanced security measures" in an Oct. 24 letter, it told vendors to submit names of all employees working on Lilly jobs to ChoicePoint. Initially, Lilly told them it planned to pull workers' credit reports, criminal history and motor-vehicle records.

Employees of contractors flooded union halls with questions. Thomas O'Donnell, president of the Central Indiana Building and Construction Trades Council, says some members argued that their credit rating shouldn't have any bearing on their ability to work at Lilly. Nor, many said, did they drive on the job.

Mr. O'Donnell and another Indiana union chief, Benjamin Ramsey, pressed Lilly to back away from the credit checks. But they were loath to push too hard. More than three years into a 10-year, $1 billion expansion of its plants and offices, Lilly is responsible for close to 20,000 jobs statewide, and is also one of the few companies still pumping money into the strained local economy. Large unionized contractors, traditionally on good terms with Lilly, nonetheless worry perpetually that Lilly will replace them with out-of-town, nonunion firms.

At a Nov. 7 meeting with union officials, Lilly officials offered to drop the credit and motor-vehicle checks. But they were adamant about criminal-background searches. "We make 60% to 70% of the world's insulin. We need to know who's on our property," insisted Lilly facilities executive Richard Menke, according to union officials who attended. Lilly acknowledges it is a world leader in diabetes-care products, but declines to specify the percentage.

Mr. Ramsey pleaded for details. "What are you looking for?" he recalls asking. He says Mr. Menke said he thought the threshold would be "major stuff," but that he couldn't elaborate. Mr. Menke referred questions to a spokeswoman, who declined to comment.

Misinformation spread almost immediately. Some contractors, told only that the checks were related to Sept. 11, reassured employees that misdemeanors wouldn't get them fired. Others stressed that ChoicePoint wouldn't look for offenses older than seven years. One foreman at a subcontractor says he was told by another supervisor that Lilly was only trying to make sure that "nobody's a terrorist and nobody has large amounts of money in secret bank accounts."

They soon learned differently. At the Lilly corporate headquarters here, asbestos-removal workers donned their hazardous-materials suits as usual on Dec. 13. Employees say Earl Connor, a foreman with Performance Abatement Services, took them aside at lunch and announced: "At 3 o'clock, there's going to be eight people who are going to lose their jobs." A receptionist in Mr. Connor's office said he'd been instructed not to comment.

Later that afternoon, Mr. Connor reassembled his team and read aloud a list of people no longer welcome at Lilly. One was Cris Lochard, then 28, who says he has worked at the center for over five years. Humiliated and anxious, he began to cry.

Ten years ago when he was 18, Mr. Lochard broke into a middle school with a group of friends. By his own admission, he stole a guitar and the group stole a VCR and camcorder. Mr. Lochard says his friends called themselves "Damage Incorporated" after a song by the band Metallica.

Sitting in a rocker in a living room full of toys, Mr. Lochard says he has cleaned up his life since then. Besides a short house-sitting job, the father of four says he is getting by on unemployment checks and his wife's income as a teacher at a Christian academy and bank branch manager.

"I felt like an ass," he says. "Where else am I going to go and get me a job that pays $16.10 an hour?"

William Groth, an attorney for a union helping Mr. Lochard, says his client's direct boss told him he "didn't want to fire Cris," but had no other job for him. Mr. Groth initially considered contesting the firing on the grounds that Mr. Lochard's offenses occurred outside the seven-year window originally specified by Lilly. The boss declined to comment.

ChoicePoint says Mr. Lochard's felony guilty plea for burglary turned up because he was jailed less than seven years ago for failing to stay in contact with his probation officer.

Michael Matthews, a senior vice president for Performance Contracting Group Inc., the Lenexa, Kan., parent of the pipe-insulation company that employed Ms. Kelly and the asbestos-removal company that employed Mr. Lochard, says the contractor had little latitude. "Are we sorry? Of course we are." But he adds, "As a subcontractor, we're bound by our contractual provisions."

While technically Lilly can't fire the contract workers, a slew of workers banned from Lilly property immediately got layoff slips from their own employers shortly after the results of the background checks came in.

Mr. Groth, the union lawyer, says he is pessimistic about the workers' chances of winning in court. He points out that Lilly has a legal right to control who can access its property. Lilly isn't subject to the outside workers' collective-bargaining agreements because the drug firm isn't their employer, he notes. "If these people had legal remedies, I'd be pursuing these cases," he says.

Teresa Butler, an Atlanta attorney who specializes in employee background checks for the law firm Littler Mendelson, agrees. "As tragic as it may be in certain situations, it just isn't a violation of the law," she says.

Among the hardest-hit economically were sheet-metal workers, because the market was already flooded with former employees of a large welding and sheet-metal firm that had just failed.

Donald Ade, 44 years old and a veteran of the sheet-metal trade, made around $70,000 a year in wages and overtime building air ducts at Lilly's Technology Center until being banned Jan. 4. His offense: possession of a pound of marijuana nine years ago. Court records show he spent one night in jail, with the remainder of a one-year sentence suspended, and paid $1,115 in court costs and fines.

"I could see if I'd gotten in trouble for having explosives, or being a member of a militia, or had a history of violent crimes," says Mr. Ade, who sports an American flag on the antenna of his black pick-up. He carries a card in his wallet showing that he has passed mandatory drug testing while at Lilly. More importantly, he says, "I'm a very competent sheet-metal worker."

Sandy D. Snodgrass was especially surprised by his removal from Lilly. The airflow technician is an 18-year employee of Johnson Controls Inc., a large Milwaukee conglomerate that makes car components, building-control systems and batteries. He and his wife are such conspicuous patriots that they devote an entire room in their home to Americana, including a Betsy Ross lamp, an Uncle Sam doll and two coffee tables handpainted with the American flag. A sign hanging in the front window proclaims, "Proud to be an American."

On Jan. 29, Mr. Snodgrass's boss and friend of 30 years, David Carter, called him and told him to come into the office instead of reporting to Lilly. He handed Mr. Snodgrass a letter. "Due to concerns raised by the background check" on Mr. Snodgrass, "Lilly requests that you no longer assign this employee to perform services for Lilly effective immediately." Mr. Carter wasn't privy to why: "It devastated me. I just couldn't fathom what would be wrong," he says.

Just about everything, as it turned out. When Mr. Snodgrass received his ChoicePoint report, it turned out to be a case of mistaken identity. Graying and weathered, the 56-year-old says he has never had a run-in with the law. The report was for a 27-year-old relative with a different middle name. The relative had once stolen a can of Skoal from a grocery store and had gotten in a scuffle with a woman who is now his wife, leaving him with misdemeanor shoplifting and battery convictions.

"I was shaking, I was so upset," says the elder Mr. Snodgrass. It was painful, he says, to think his co-workers mistrusted him and a relative's privacy was violated.

ChoicePoint attributes the error to the fact that at some point, the younger man's Social Security number got commingled with the elder's in a database. It contends the elder Mr. Snodgrass didn't write down his date of birth on his consent form; Mr. Snodgrass says he did. Lilly won't discuss the episode but admits that sometimes, "mistakes are made." The elder Mr. Snodgrass was allowed to return to Lilly.

A Johnson Controls spokesman says what happened to its longtime employee was "unfortunate" but calls Lilly's security policy "fully understandable."

Such errors aren't unheard of in the database industry. ChoicePoint says it receives 30 to 50 disputes a month from consumers questioning information in their credit reports, criminal and other reports, or about 480 a year. The company checks over three million names a year. ChoicePoint says, therefore, that it has a dispute rate of under 1%. Mr. Lee says the disputes often result from clerical errors by county courts. For example, a local courthouse may fail to correct the file to say a record has been expunged, and then the courthouse may sell its data electronically to ChoicePoint and the error is repeated.

Occasional database glitches aside, Mr. Lee, the ChoicePoint spokesman, defends his firm's role in the purges. "In each of these cases, the system worked," he says, because ChoicePoint uncovered crimes and, when it found errors, corrected them. He adds that ChoicePoint is forbidden by law from now offering to sell information it gathered on the workers to third parties such as insurers or mortgage lenders. But he adds: "Don't lose sight of the fact that the person committed the crime."

Still, after news of the removals hit the Indianapolis Star newspaper and local television stations, signs emerged that some Lilly executives were having second thoughts. Early this year, Mr. O'Donnell, the union official, called up Mr. Menke and complained that the dismissals were "pretty petty." Mr. Menke offered to review letters requesting reinstatement, says Mr. O'Donnell. But another union official, Mr. Ramsey, says Mr. Menke told him in a separate conversation that "we still contend we have a right to do this." Ms. Todd, the Lilly spokeswoman, denies Lilly is rethinking its policy. But several union officials say the pace of removals has slowed.

There have also been some reversed decisions. Electrician Paul Gibson, one of the foremen commanding 18 other electricians at an insulin-production plant, was pulled aside by a senior manager on Jan. 28. "Paul, this is the hardest thing I've ever had to do, but you need to get your things and come with me," Mr. Gibson recalls him saying. The manager, who didn't return a telephone call seeking comment, handed Mr. Gibson a sealed envelope with his ChoicePoint report. `This has gotta be a mistake," Mr. Gibson blurted out.

Nine years ago, when he was 20, Mr. Gibson, was charged with misdemeanor battery after getting into a fight with his then-girlfriend's best friend. He says -- and his then-girlfriend concurs -- that he was trying to break up a fight between the two women, and pulled the other woman away from his girlfriend. Court records show the woman he pulled away accused him of grabbing her by the arm and neck and pushing her into a closet, leaving a bruise on her arm. A judge fined him $27 and assessed $113 in court costs.

His former girlfriend, Susan Lorimer, says the incident "was nothing; it was just a bunch of kids growing up. For six years, he never raised his hand or even his voice at me." Another friend there that day says she never knew Mr. Gibson faced charges over the incident and calls him "a good husband and father."

As for Mr. Gibson's former boss, Aaron Lohman, he calls Mr. Gibson "a professional worker" who never displayed any violent tendencies and whom he'd take back if he could.

Mr. Gibson found other work but had to take a 45% pay cut from the $90,000 or so he says he was on track to make this year as a foreman. In January, he wrote a letter to a Lilly official explaining the details of his case. "I love working at Lilly's and would love to be back," adding, "I deeply apologize for my actions." A month later, without explanation, Lilly sent back a terse memo reinstating his access rights. Mr. O'Donnell, the union official, says six other electricians from Mr. Gibson's local union were also allowed back.

Davina Wright contributed to this article