Controversy over the legality of reputation checks... HR compliance that protects companies

-Kwon Il Law Firm (Limited) Daeryun Lawyer’s Legal Column

Recently, the Personal Information Dispute Mediation Committee ruled that conducting reputation searches without the consent of the parties is not a violation of the Personal Information Protection Act, causing quite a stir in the job market. The act of checking the facts of the previous academy to confirm the false experience of the hired academy instructor was not considered illegal. Some people have an optimistic interpretation of this, saying, "Now it is okay to ask applicants about their previous employers' reputations without their knowledge," but if this is fully accepted, it could lead to significant legal risks for companies, so special caution is needed.

First, not only should we keep in mind that the Dispute Mediation Committee's decision is merely a mediation decision with no legal binding, unlike court rulings, but we must also accurately understand the scope of this Dispute Mediation Committee's decision. The core of the case was not ‘reputation’ but ‘authenticity of career’. In other words, the act of verifying objective facts, such as the period of employment or position listed on the resume, is considered part of a legitimate hiring process and is permitted as an exception. However, if you go beyond this and go into the area of ​​collecting subjective evaluations of applicants' tendencies, work abilities, and conduct, the story is different. This is because, in accordance with Article 2, Paragraph 1, (b) of the Personal Information Protection Act, a third party's subjective evaluation, such as an individual's tendencies or performance, is clearly personal information if it can be combined with other information to identify a specific individual.

Therefore, if a hiring company collects personality evaluations beyond the scope of fact-checking, such as "What was the applicant's work attitude like" or "What was the friction with co-workers or the specific reason for leaving the company?" from the human resources manager at the former employer without consent, the hiring company would be collecting personal information without the consent of the information subject, which would be a violation of Article 15, Paragraph 1 of the Personal Information Protection Act, and the former employer who provided this would be violating Article 17 or Article 17 of the same Act as providing personal information to a third party beyond the scope of collection purpose. Since there is a high possibility of violating Article 18, Paragraph 1, not only the former employer who provided the information, but also the hiring company that collected it unfairly cannot be free from criminal punishment or fines. In particular, asking for sensitive information, such as union membership or health status, may result in more severe sanctions as it is sensitive information that is subject to additional, heavier regulations (Article 23 of the Personal Information Protection Act).

Furthermore, in addition to criminal liability, there is another risk factor called civil liability for damages. Even though a simple reputation inquiry does not directly fall under the category of 'interfering with employment' under Article 40 of the Labor Standards Act, the judiciary applies strict standards to acts that violate an applicant's right to self-determination of personal information. In fact, the Seoul High Court (2018na2073790) recognized a company that went beyond its reasonable discretion and conducted an unobjective evaluation search only on certain applicants, liable for damages due to illegal acts on the grounds that the fairness of the hiring process was lost and the applicant's reasonable expectation and trust of receiving a fair evaluation was violated.

Ultimately, verification to select excellent talent is essential for companies, but it is difficult to protect the practice of negative background investigations with weak legal basis within the current compliance monitoring system. Forcing an arbitrary investigation by misinterpreting the Dispute Mediation Committee's decision as an 'indulgence' could be an act that undermines the legitimacy of the hiring process.

In order to fundamentally eliminate the possibility of unnecessary disputes, legal and human resources managers must clearly notify the possibility of conducting reputation checks at the recruitment screening stage and institutionalize a procedure to obtain official ‘written consent’ from applicants that specifies the purpose of collection and use, collection items, retention period, right to refuse consent, and disadvantages (Article 15, Paragraph 2 of the Personal Information Protection Act). It should be kept in mind that a company's core strategy of securing excellent talent can only be justified when thorough legal safety measures are preemptively established.
 

Reporter Lee Dong-oh (canon35@mt.co.kr)

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