Orange County, Ca (February 19) – The Ninth Circuit Court of Appeals recently held in Gilberg v. Cal. Check Cashing Stores, LLC that employers are required to use two separate, standalone forms when conducting background checks on applicants, rather than combining both disclosures into a single document.
In Gilberg, the employer’s disclosure form – which was designed to comply with the Fair Credit Reporting Act (FCRA) and various state law equivalents, such as California’s Investigative Consumer Reporting Agencies Act (ICRAA) – was deemed to violate both federal and state law requirements. The Court held that this single form did not constitute a proper FCRA disclosure or a proper ICRAA disclosure.
Both the FCRA and the ICRAA require employers to provide a “clear and conspicuous” disclosure to the candidate before any consumer report is generated. Each disclosure must be standalone, meaning that it is “in a document that consists solely of the disclosure.” By combining both disclosures into a single document, the Ninth Circuit found that the employer’s disclosure form violated both federal and state law because it failed to meet the statutes’ “clear and conspicuous” requirement.
As a result of this decision, employers conducting background checks in California (as well as in Arizona, Hawaii, Alaska, Idaho, Montana, Nevada, Oregon, and Washington) should carefully review all applicable disclosure requirements and ensure that each disclosure is provided to the applicant in a standalone form. If the employer utilizes the services of a vendor to perform background checks, they should similarly ensure that the vendor is following all applicable requirements to avoid potential liability.
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