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9th Circuit: Keep your FCRA notices solitary

Case provides a nice reminder

Posted February 20, 2019

In a brief opinion from the 9th Circuit (Alaska, California, Arizona, and Hawaii), an employer lost its argument that it was allowed to include with a FCRA notice “other, state-mandated disclosure information, which furthers rather than undermines FCRA’s purpose.”

As the court pointed out, FCRA requires that its disclosure be “in a document that consists solely of the disclosure,” and that a disclosure form that included a liability waiver in the same document violated the law’s standalone document requirement.

The court also disagreed with the employer regarding its argument that the additional information furthered FCRA’s purpose; in fact, the court indicated that it provided more confusion. It pointed to verbiage in an additional form that was less than sparkling with clarity:

“The scope of this notice and authorization is all-encompassing; however, allowing [the employer] to obtain from any outside organization all manner of consumer reports and investigative consumer reports now and, if you are hired, throughout the course of your employment to the extent permitted by law.”

Employee notice requirements can seem rather simple on their surface, but failure to comply with the details can result in spending resources trying to defend an action. Providing extraneous information, particularly if it is written in an obfuscative manner (like these two words) can add an extra layer of risk.

Employers may use consumer reports when they hire new employees and when they evaluate employees for promotion, reassignment, and retention — as long as they comply with the FCRA. The FCRA spells out employer responsibilities when using consumer reports for employment purposes.

The FCRA is designed primarily to protect the privacy of consumer report information and to guarantee that the information supplied by consumer reporting agencies is as accurate as possible.

Before an employer can get a consumer report for employment purposes, the employer must notify the individual in writing — in a document consisting solely of this notice — that a report may be used. Employers also must get the person’s written authorization before they ask a CRA for the report. (Special procedures apply to the trucking industry and for employee misconduct investigations.)

Gilberg v. California Check Cashing Stores, LLC, 9th Circuit Court of Appeals, No. 17-16263, January 29, 2019.

This article was written by Darlene M. Clabault, SHRM-CP, PHR, CLMS, of J. J. Keller & Associates, Inc.

Employment Law Essentials ManualJ. J. Keller's Essentials of Employment Law Manual covers more than 100 vital HR topics, including FMLA, ADA, HIPAA, FLSA, COBRA and more.


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