Employers must provide applicants and employees with separate federal and state Fair Credit Reporting Act (FCRA) disclosure forms, said the 9th Circuit in an important decision released last week. Combining any state disclosure notices with the FCRA notice, the Court said, violated the FCRA’s requirement for a “standalone” disclosure that is “clear and conspicuous.” The disclosure notice at issue had combined the FCRA disclosure with several short paragraphs outlining the rights of applicants in seven other states, including California.
Some employers have interpreted the federal FCRA’s “standalone” requirement that the notice be “in a document that consists solely of the disclosure” to mean that it should not include extraneous information like waivers, nor should it be included on an employment application or offer letter. But the 9th Circuit once again confirmed that the statute means what it says, including that “solely" means “singly” so that a notice form must consist solely of the FCRA disclosure in order to satisfy the FCRA “standalone” document requirement. (To be clear though: the FCRA does expressly permit employers to combine the disclosure with the employee’s written authorization to conduct the background check into one document.)
The Takeaway: Employers operating in the 9th Circuit (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington) interested in running background checks should confirm that their disclosure forms are in compliance. Employers operating in other states and those who outsource this to vendors are well advised to do the same. Failing to account for this technical compliance issue could prove costly.