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Federal Court Rejects Argument that Background Check Disclosure Form is Not a Stand-alone Document

  December 13, 2017

In recent years a favorite target of the plaintiffs bar concerning the Fair Credit Reporting Act has been the background check disclosure form used by employers in order to gain permission to run background checks during the hiring process. Within the FCRA there is language that mandates a clear and conspicuous disclosure, consisting solely of the disclosure for these forms. In the past employers have found themselves targeted for class action lawsuits by including other language, generally consisting of waiver liability requests, which according to some technically violate the FCRA.

A recent court decision addressed this very issue and may help set a precedent for future cases on what constitutes “clear and conspicuous”. In Reed v. CRST Van Expedited, Inc., Walter Reed alleged that he was not informed that a background check would be done on him. The document he signed included information about the content of the consumer report, his right to request a copy of the report, and his right to dispute the report, and the companies potentially generating the report. It also included a statement that CRST would provide additional notices. 

The court ruled that the disclosure form used was “clear and conspicuous” and the existence of the other information did not render the disclosure not standalone. Since that information was relevant to the obtainment of the consumer report, it complied with the FCRA requirement.

This decision should come as welcomed by many employers as it has set some commonsense standards to the background check disclosure requirement. However, it continues to remain important for all employers to conduct a periodic review of all the forms they use and the hiring procedures they follow to maintain compliance will all relevant law. 

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