Ninth Circuit Holds Employers May Provide a Standalone Background Check Disclosure Concurrently With Other Documents
Tags : FCRA Compliance
On April 24, 2020, the Ninth Circuit held that the Fair Credit Reporting Act (FCRA) permits an employer to provide job applicants with a background check disclosure document at the same time the employer provides job applicants with other documents, so long as the background check disclosure is presented in a "standalone" document.1 In so holding, the Ninth Circuit declined to extend its prior trio of rulings (Syed, Gilberg and Walker) that adopted a formalistic interpretation of the FCRA's standalone disclosure rule.
This is the Ninth Circuit's fourth decision since 2017 regarding an employer's obligation to disclose its intent to order a background report "in a document consisting solely of the disclosure," commonly referred to as the "standalone" requirement. In its prior trio of decisions, the Ninth Circuit interpreted the barebones language in the FCRA - "a document consisting solely of the disclosure" - quite literally, reasoning that the word "solely" means "alone, singly" or "entirely, exclusively" so that "FCRA precludes the inclusion of any terms besides a disclosure and an exempted authorization."
In its latest decision, the Ninth Circuit rejected the plaintiff's argument that a single-page, two-sentence document entitled "Fair Credit Reporting Act Disclosure Statement" was not "standalone" because the employer presented it contemporaneously with a separate multi-page document with notices, waivers, and agreements unrelated to the background check. The Ninth Circuit held that an employer may provide a standalone FCRA disclosure contemporaneously with other documents. The court held that the employer's disclosure document satisfied the "standalone" requirement because that single-page document included nothing beyond disclosing an intent to obtain a background report, the employer's logo, and a signature block.
Takeaways for Employers
The Ninth Circuit is the only federal appellate court to interpret the "standalone" disclosure requirement to date. Whether other courts will follow the Ninth Circuit's hyper-technical reading of the statute remains to be seen. In the meantime, it is prudent for employers to continue to intensively scrutinize the text and presentation of the background check disclosure document to candidates in hard copy and electronic format. The number of class action lawsuits against employers continue to spike.2 Relatedly, employers should be mindful of compliance with the growing list of state and local laws that govern background check disclosures and inquiries into and the use of criminal history and credit history information.3 Class action lawsuits over criminal record screening policies are also gathering momentum.
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Posted: April 28, 2020
1 Luna v. Hansen & Adkins Auto Transport, Inc., No. 18-55804 (9th Cir. Apr. 24, 2020).
2See, e.g., Rod Fliegel, Alison Hightower, and Allen Lohse, High Alert for California Employers and Employers Nationwide for the Second Wave of FCRA Class Actions, Littler Insight (Oct. 19, 2017); Rod M. Fliegel and Jennifer Mora, Weathering the Sea Change in Fair Credit Reporting Act Litigation in 2014, Littler Insight (Jan. 6, 2014); Rod Fliegel, Jennifer Mora and William Simmons, The Swelling Tide of Fair Credit Reporting Act (FCRA) Class Actions: Practical Risk-Mitigating Measures for Employers, Littler Report (Aug. 1, 2014).
3See, e.g., Alison Hightower and Rod Fliegel, New Year, New Local Ban-the-Box Restrictions on Background Checks, Littler Insight (Feb. 12, 2020); Steven Kaplan and Emily Carapella, Maryland Enacts a Statewide "Ban-the-Box" Law, Littler ASAP (Feb. 5, 2020); Hal Wellford and Joe Wientge, St. Louis Enacts Ban-the-Box Ordinance Applicable to Private Employers, Littler ASAP (Jan. 29, 2020).
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