Court Rejects Claims that Disclosure and Authorization Forms for Background Checks Violated Fair Credit Reporting Act (FCRA)
In February 2023, the United States District Court for the Northern District of California granted an employer’s motion for summary judgment that rejected claims made by a plaintiff in a lawsuit that the employer’s disclosure and authorization forms for a background check violated the federal Fair Credit Reporting Act (FCRA) that regulates background checks in America.
According to the ruling, the plaintiff had applied to work for the employer and signed disclosure and authorization forms to perform a background check as part of the application process. The plaintiff sued the employer and claimed the disclosure and authorization forms violated the FCRA because they were not “clear and conspicuous” or in a “standalone” document.
FCRA 15 U.S.C. § 1681b(b)(2)(A)(i) states that a background check cannot be procured unless “a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes.”
The employer moved for summary judgment and the court granted the motion, finding the disclosure and authorization forms complied with the FCRA’s “clear and conspicuous” requirement since they were “reasonably understandable,” “readily noticeable to the consumer,” and did “not create confusion as to the person or entity that will conduct the report.”
The Court also found that the various links, texts, logos, phrases, and statements that the plaintiff cited in the lawsuit as “extraneous information” in the background check disclosure and authorization forms did not violate the “standalone” document requirement of the FCRA. A complete copy of the Court’s opinion made on February 1, 2023, is available here.
Enacted by the U.S. Congress in 1970, the FCRA is federal legislation that promotes the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies (CRAs), and protects consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports. A complete copy of the FCRA is available here.
ClearStar is a leading global Human Resource technology company specializing in background checks, drug testing, and occupational health screening. ClearStar offers background check solutions for employers that comply with background screening laws such as the FCRA. To learn more about FCRA-compliant background checks, contact ClearStar.
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