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U.S. Supreme Court Elects Not to Hear Ninth Circuit Decision Concerning Background Check Disclosures

  December 14, 2017

In the last few years there have been many lawsuits concerning alleged FCRA violations regarding background check disclosure forms. The Fair Credit Reporting Act (FCRA) prohibits employers from obtaining a consumer report on an employee or applicant without first providing a clear and conspicuous disclosure consisting solely of the disclosure. The plaintiffs bar has targeted employers who use disclosure forms that have “extraneous information”, such as a release of liability, as part of the form. They contend that including additional information on a disclosure form is a FCRA violation because it is not “clear and conspicuous”. 

Recently the U.S. Supreme Court declined to hear the appeal to an important case that considered whether a disclosure form met the standards set in the FCRA. In Syed v. M-I, LLC, the Ninth Circuit agreed with the employee that the inclusion of a waiver of liability in the disclosure document willfully violated the FCRA. The Ninth Circuit ruled that if the document contains any other information other than the disclosure and an authorization, then it does not meet the FCRA requirements. They ruled the plaintiff had standing because he alleged more than a “bare procedural violation” of the FCRA. 

This case was similar to another important case, Spokeo, Inc. v Robins. In that ruling the courts found for the defendant primarily because the plaintiff did not allege “concrete injury” and so lacked standing to bring a claim. 

These cases highlight the absolute necessity of employers to review the forms they use when hiring. If you are not using a stand-alone form containing only the disclosure and authorization, you are risking expensive litigation. The courts have already affirmed the right for plaintiffs to bring claims against any employer if they allege “concrete injury” due to using a form that violates the FCRA. Employers should periodically review all forms and procedures. 

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