Posts

Ninth Circuit: More Guidance on Standalone Disclosures for Background Checks

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All Employers with AK, AZ, CA, HI, ID, MT, NV, OR, WA, Guam, and Mariana Islands Employees

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March 30, 2020

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When obtaining background or credit reports, the federal Fair Credit Reporting Act (FCRA) requires employers to provide the applicant or employee with a disclosure of their right to obtain a copy of the report, and obtain written authorization before requesting the reports. Although the authorization may be on the same page as the disclosure, no other information may be present.

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Ninth Circuit: FCRA Disclosure Notice to Employees Must Stand Alone

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All Employers with AK, AZ, CA, HI, ID, MT, NV, OR, WA, Guam, and Northern Mariana Islands Employees

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January 29, 2019

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(888) 378-2456

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.

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IMPORTANT: Updated Pre-Adverse Action Notice for Applicants and Employees!

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All Employers

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September 21, 2018

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(888) 378-2456

The federal Consumer Financial Protection Bureau (CFPB) recently issued an updated version of “A Summary of Your Rights Under the Fair Credit Reporting Act” (Summary) that includes a new notice to consumers about their right to implement a free “security freeze” under certain circumstances, preventing consumer reporting agencies from disclosing the contents of a consumer report. Although the Summary has been updated with this new notice, “security freezes” do not apply to any person “using the information for employment … or background screening purposes.”

Can Applicants Sue Over the Pre-Adverse Action Notice Requirement?

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All Employers with Employees in AR, DE, IA, MN, MO, NE, ND, NJ, PA, SD

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September 6, 2018 and September 10, 2018

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Several Court of Appeal cases have come down recently on whether or not an applicant can sue an employer for failing to provide a pre-adverse action notice as required under the Fair Credit Reporting Act (FCRA). There is a split in the courts between the Ninth Circuit (applicants cannot sue) and Seventh Circuit (applicants can sue). More recently, the Third Circuit issued its own ruling.

Seventh Circuit: Fair Credit Reporting Act Pre-Adverse Action Requirements Are Actionable

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Employers with IL, IN, WI Employees

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August 29, 2018

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(888) 378-2456

Contrary to the Ninth Circuit’s recently ruling, the Seventh Circuit Court of Appeal stated that an employer’s failure to provide a copy of an applicant’s background check report and notice of rights under the Fair Credit Reporting Act (FCRA) gives an applicant standing to sue the employer, because it amounts to an allegation of being deprived a chance to benefit. Employers are required to provide the report and notice to applicants under the FCRA so that they may have the opportunity to contest the accuracy or completeness of the information.

Ninth Circuit: Fair Credit Reporting Act Pre-Adverse Action Notice Is a Procedural Requirement and Not an Actionable Right

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Employers with AK, AZ, CA, HI, ID, MT, NV, OR, WA, Guam, and Northern Mariana Islands Employees

EFFECTIVE

July 13, 2018

QUESTIONS?

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(888) 378-2456

In Dutta v. State Farm, the Ninth Circuit Court of Appeal stated that an employee did not have standing to sue a prospective employer for failing to comply with the pre-adverse action notice requirements under the Fair Credit Reporting Act (FCRA). The FCRA requires employers to give applicants notice before they take any adverse employment action based on the results of a consumer report (e.g., credit report). This requirement is meant to give the applicant an opportunity to contest or correct information in the credit report. After providing such pre-adverse action notice and certain timing requirements are met, an employer may then take the adverse action if it still intends to do so.