Ninth Circuit: FCRA Disclosure Notice to Employees Must Stand Alone

In Gilberg v. Cal. Check Cashing Stores, the Ninth Circuit stated that the Fair Credit Reporting Act (FCRA) prohibits including “extraneous” information with the required notice of rights, including legal rights individuals have under state fair credit reporting laws. The FCRA applies to employers who obtain background or credit reports on applicants and employees in the employment context. Specifically, the FCRA requires employers to provide the individual with a disclosure of their right to obtain a copy of the report, and obtain written authorization before obtaining the reports. Although the authorization may be on the same page as the disclosure, no other information may be present. Additionally, because the California Investigative Consumer Reporting Agencies Act (ICRAA) mirrors the FCRA, the same segregation requirements apply to California-required disclosures.

It is unclear how this ruling will actually impact employers given the recent Ninth Circuit ruling in Dutta v. State Farm, where the court stated that an applicant did not have standing to sue under the FCRA for the employer’s failure to timely give a required pre-adverse action notice because it was a procedural requirement and there was no evidence of any actual harm or substantial risk of harm. In Gilberg, the court stated that the required notice of rights was not clear because of the combination of federal and state disclosures, but only referenced the statement of rights under New York and Maine laws. Moreover, there was no discussion of how these alleged violations actually harmed the employee; rather, the case was remanded to the district court to proceed.