2019-Feb 15: Federal Circuit Court Requires Separate Federal and State Disclosure Notices for Background Checks

Federal Circuit Court Requires Separate Federal and State Disclosure Notices for Background Checks

In a decision that could have nationwide implications for how employers conduct background checks, the 9th Circuit Court of Appeals recently held in Gilberg v. California Check Cashing Stores, LLC that a background check disclosure form violates the federal Fair Credit Reporting Act (FCRA) if it includes any extraneous information relating to any state background check disclosure requirements. The FCRA and the laws of several states require an employer to provide certain written disclosures to applicants and employees before obtaining a background check on them from a third party. It is common for employers in states that also have their own disclosure requirements to combine the FCRA and state disclosures into one form. However, as the 9th Circuit noted in its decision, which applies to the states of Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington, the FCRA requires that its disclosure be “clear and conspicuous” and standalone in “a document that consists solely of the [FCRA] disclosure.” (The one exception is that the FCRA expressly allows the individual’s written authorization to conduct the background check to be combined with the disclosure into one document.)

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