Adverse Action

Adverse Action

Adverse action is a decision not to hire, to withdraw a conditional offer, or to take another negative employment action based in whole or in part on information in a background check (consumer report). Under the Fair Credit Reporting Act (FCRA), employers must follow a two-step process: send a pre-adverse action notice with required disclosures, allow time for the applicant to review and dispute, then send a final adverse action notice if the decision is confirmed.

Compliance note

  • Before taking adverse action, provide a pre-adverse action notice, a copy of the report, and the FCRA Summary of Rights.
  • Allow a reasonable period for the candidate to review and dispute the report (many employers use about 5 business days; check any applicable state or local rules).
  • If the decision stands, provide a final adverse action notice that includes required CRA contact information and statements of rights.
  • Apply criteria consistently and consider EEOC guidance on job-relatedness and business necessity.

Related terms

Authoritative source

Frequently Asked Questions

Q: What’s the difference between pre-adverse and adverse action?

A: The pre-adverse action notice alerts the candidate that you may take a negative action based on the report and gives them a chance to review and dispute. The final adverse action notice is sent only if you decide to move forward after that review period.

Q: How long should we wait between the two notices?

A: The FCRA requires a “reasonable” time. Many employers use about five business days, but you should follow any stricter state or local requirements and your written policy.

Q: What must be included in the notices?

A: Pre-adverse: the notice, a copy of the report, and the FCRA Summary of Rights. Final adverse: the decision notice, the CRA’s contact information, a statement that the CRA did not make the decision, and notice of the right to dispute and obtain another free copy within 60 days.

DISCLAIMER: The information provided in this glossary is for general informational purposes only and should not be construed as legal advice. While we strive for accuracy, EDIFY Background Screening does not guarantee that the definitions or explanations are complete, up to date, or error-free. Employers should always consult with competent legal counsel to ensure compliance with applicable laws and regulations.

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