Background Checks and Employment Class Actions: FCRA Cases, Disclosure Forms, State and Federal Litigation

Description

The Ninth Circuit recently issued two mostly pro-employer federal FCRA background check decisions in Walker v. Fred Meyer Inc. and Luna v. Hansen & Adkins Transport Inc. that create requirements for background check disclosures.

The FCRA requires employers who obtain a consumer report on job applicants to disclose that process "in a document that consists solely of the disclosure." Further, in addition to the standalone requirement, the FCRA and California's FCRA-like disclosure requirements found in the Investigative Consumer Reporting Agencies Act both require the disclosure form to be "clear and conspicuous." According to the court, "clear" under the FCRA means "reasonably understandable" and "conspicuous" means "readily noticeable to the consumer."

The Ninth Circuit cases also clarified what is considered adverse action after a background check is conducted, and provided guidance on a reasonable waiting period, as well as how post-adverse action notices must be drafted to be compliant. Employers' counsel must be aware of these standards and the potential penalties that businesses are subject to in the event of a breach. Plaintiff's counsel should be familiar with the many options for potential statutory and actual damages, punitive damages, costs, and attorneys' fees that can be acquired from these types of cases.

State and federal class action litigation on these matters continues to rise, and decisions have created an array of guidance regarding FCRA and background checks.

Listen as our expert panel provides employment counsel with best practices and tips on responding to the guidance in these recent Ninth Circuit FCRA opinions.