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Court rules that employer’s liability waiver violated FCRA

The U.S. Court of Appeals for the Ninth Circuit ruled that oilfield services company, Schlumberger, Inc., willfully violated the federal Fair Credit Reporting Act when it improperly placed a liability waiver on its job application disclosure form.

The decision reversed a district court’s previous dismissal of the suit. The lead plaintiff in the case claimed that the company’s job application disclosed that the company intended to obtain a consumer report on him but also included language that, by signing the document, applicants would waive their rights to sue the company for any information that was uncovered through the background check.

According to Law360.com, in reversing and remanding the district court’s decision to throw out the case, the appeals court’s three-judge panel also said the company had willfully violated the statute, opening up the plaintiff's petition for both statutory and punitive damages. This was the first time a federal court of appeals had ruled on whether an employer can satisfy that section of the FCRA by providing a job applicant with such a disclosure while simultaneously severing liability.

“A prospective employer violates [the statute] when it procures a job applicant’s consumer report after including a liability waiver in the same document as the statutorily mandated disclosure,” the panel said. “In light of the clear statutory language that the disclosure document must consist ‘solely’ of the disclosure, a prospective employer’s violation of the FCRA is ‘willful’ when the employer includes terms in addition to the disclosure, such as the liability waiver here.”

The case is Sarmad Syed et al. v M-I, LLC et al., case number 14-17186, in the U.S. Court of Appeals for the Ninth Circuit.

Source: Law360.com, 1/23/2017

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