One of the main protections offered to consumers/applicants when a background check is procured on them is requiring the employer to get their signed consent and authorization on a “standalone” disclosure and “clear and conspicuous” disclosure requirements pursuant to the Fair Credit Reporting Act (FCRA).
Up until last year the “standalone” disclosure had to be on one page and consist solely of the disclosure and authorization (separate from any end user hiring forms), however this was causing confusion with job applicants which prompted courts to change the law to have the disclosure separate from the authorization (essentially a 2 page form).
The FCRA also states that end users need to provide certain disclosures to the applicants if they live in certain states (i.e. California residents are entitled to a copy of their background check pursuit to state law, this is also the case for New York, Minnesota, and Oklahoma residents). This means that the above mentioned two page disclosure must have language and a check box for residents residing in those states. The ninth circuit has ruled that having additional state notices on the federal disclosure form violates the FCRA by including “extraneous” state law notices potentially “confusing” language on the disclosure forms.
The case in question Gilberg vs. California Check Cashing Stores, LLC involves a class action filed by Desiree Gilberg (former employee of CheckSmart Financial LLC), who completed a “Disclosure Regarding Background Investigation” which states of course that CheckSmart may obtain a background report on Ms. Gilberg. The disclosure also included language regarding the applicant’s right to obtain a copy of the report procured on her under various state laws (as mentioned above in CA, MN, and OK).
The Ninth Circuit court ruled that by having additional state requirements this violates the FCRA “Standalone” requirement “The statute [means] what it [says]: the required disclosure must be in a document that consists “solely” of the disclosure.” By having additional states and there requirements listed where the applicant isn’t currently residing can cause confusion the courts ruled. The second issue the Ninth Circuit had was the disclosure wasn’t “clear” on what was going to be checked during the background screening process:
The scope of this notice and authorization is all-encompassing; however, allowing CheckSmart Financial, LLC to obtain from any outside organization all manner of consumer reports and investigative consumer reports…
The problem with the above statement is “All-Encompassing” the court considered this language vague, and by putting a semicolon after the first statement lacked a subject and was incomplete. Instead it should read:
Which may include information about your character, general reputation, personal characteristics, and/or mode of living, and which can involve personal interviews with sources such as your neighbors, friends, or associates. These reports may contain information regarding your credit history, criminal history, social security verification, motor vehicle records (“driving records”), verification of your education or employment history, workers’ compensation, or other background checks. You have the right, upon written request made within a reasonable time after receipt of this notice, to request disclosure of the nature and scope of any investigative consumer report
Employers need to understand the importance of this new change, and make necessary revisions to their current disclosure forms to stay in compliance.
One out of every six crimes occurs in the workplace and homicide is the second leading cause of workplace death in the U.S.
National Credit Verification Service reports that 25% of the MBA degrees it verifies on resumes are false.
72% of shrinkage is due to employee theft.
34% of all job applications contain lies.
30% of small business failure is caused by employee theft.