Employers Should Periodically Monitor Disclosures for FCRA Compliance
The Fair Credit Reporting Act (“FCRA”) requires employers to follow strict procedures when utilizing the services of a background screening company, such as InCheck, to conduct a background screening on an applicant. One such employer requirement is often referred to as the “disclosure.”
Disclosure necessitates that before an employer may procure a background screening report on an applicant, the employer must first provide the applicant with a clear and conspicuous disclosure, which communicates that a background screening report may be obtained for employment purposes. Additionally, the FCRA mandates that the document used to communicate the disclosure must consist solely of this disclosure. Case law has explained that to “consist solely of the disclosure,” the disclosure must be on a standalone document, separate from all other employment documents, and must not include extraneous information.
With that in mind, let’s examine the recent case Herbert v. Barnes & Noble, Inc. Here, a background screening company provided an employer with a sample disclosure document that included the background screening company’s disclaimer. Subsequently, the employer sent the disclosure sample to outside counsel for review and some revisions were recommended. However, outside counsel did not opine on the background screening company’s disclaimer because they understood it to be business-to-business language that would not be a part of the disclosure which would be displayed to applicants. The disclaimer read in part, “Please note: Nothing herein should be construed as legal advice or guidance. Employers should consult their own counsel about their compliance responsibilities under the FCRA and applicable state law.” Afterwards, the employer sent the revised disclosure document to the background screening company so that it could be used during the background screening process. The background screening company programmed the disclosure into their website and asked the employer for a final review before the disclosure would be sent to applicants. A non-lawyer employee, who was aware that the disclaimer was included in the disclosure, approved the disclosure.
Two years later, the plaintiff, in this case, applied to work for the employer and was ultimately provided with the aforementioned disclosure document. Consequently, the applicant alleged that the employer willfully (knowingly or recklessly) violated the FCRA by including the disclaimer language in the disclosure document. Specifically, the applicant alleged that the disclaimer language amounted to extraneous information and that the employer violated the FCRA’s requirement for the disclosure to consist solely of the disclosure. In response, the employer argued that the extraneous language in its disclosure was due to an inadvertent drafting error and that no reasonable jury could find its alleged FCRA violation was willful. Nevertheless, a California Court of Appeals found that a reasonable jury could find that the employer willfully violated the FCRA because at least one of the employer’s employees was aware of the extraneous information in the disclosure before the disclosure was displayed to applicants, the employer may not have adequately trained its employees on FCRA compliance, and/or the employer may not have had a monitoring system in place to ensure its disclosure complied with the FCRA. Consequently, the Court remanded the case to the trail court.
Herbert v. Barnes & Noble, Inc. offers some valuable takeaways for employers. First, the case illustrates the types of information within a disclosure document that could be considered extraneous, and thus, could potentially result in an FCRA violation. Additionally, the case demonstrates relevant facts a court may consider when deciding whether a FCRA violation was willful. Last, and importantly, the case is a reminder that employers are ultimately responsible for the compliance of their disclosure even when they utilize a background screening company’s sample document. As such, employers should make sure that their disclosure document is carefully reviewed both before use, as well as, periodically, for FCRA compliance.
You may also learn more about disclosure forms in this overview. At InCheck, compliance is a top priority, and we want to ensure our clients are up to date with the latest legal changes across the country.
Please feel free to call (414- 727-1718) or email (email@example.com ) us today for more information on how we can help you with your background screening process!
Please note that the information contained in this blog is being provided for informational purposes only and should not be construed as legal advice. Please consult your legal counsel to ensure that your background screenings comply with all federal, state, and local laws.