February Employment Law Bulletin
Ninth Circuit Issues Fair Credit Reporting Act Decision That Endangers Most Multi-State Background Check Authorizations
The federal Fair Credit Reporting Act (FCRA) applies to more than just credit ratings. It applies to any sort of background check (financial, criminal, or professional) conducted by a third-party vendor that regularly provides those services (“Consumer Reporting Agencies” or “CRAs”). Before obtaining a background report from a CRA, an employer must disclose the fact that they will obtain such reports to the employee in a form that is both “clear and conspicuous” and that “consists solely of the disclosure” or the disclosure and the employee’s written authorization in a single form. In prior ELB installments, we have discussed how some CRAs and employers have run afoul of the latter requirement by including, for instance, liability waivers for reference providers within the authorization. (See, e.g., the Feb. 2017 ELB, the Aug. 2016 ELB, and the Aug. 2018 ELB). We sort of thought we had it all figured out, until the Ninth Circuit Court of Appeals issued a “hold-my-beer-and-watch-this” ruling in the case of Gilberg v. California Check Cashing Stores, LLC et al. (Jan. 29, 2019)…..
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