Some employers are surprised to learn that the federal Fair Credit Reporting Act (FCRA) governs employment background checks. They are also shocked to find out that failure to comply with the FCRA’s disclosure and authorization requirements can be very expensive.
As an example, Delta Air Lines reached a proposed $2.3 million settlement agreement last month in a class action lawsuit regarding alleged violations of the FCRA. Under the FCRA, it is unlawful to procure a consumer report for employment purposes without “providing a clear and conspicuous disclosure in writing in a standalone document before the report has been pulled that a consumer report may be obtained for employment purposes.” The plaintiffs alleged Delta Air Lines’ hiring forms failed to provide sufficient disclosures to current and prospective employees regarding background checks. Additionally, the plaintiffs alleged that Delta Air Lines’ forms included extraneous and misleading information in violation of the FCRA’s “clear and conspicuous” requirement.
This case serves as an (expensive!) reminder that the FCRA requires employers to provide “clear and conspicuous” standalone disclosure of background checks and receive written authorization to procure the job applicant’s consumer report. Employers should avoid risky litigation by ensuring their FCRA disclosure and authorization notices are compliant with federal and state law. Many vendors provide these forms to clients, but unfortunately, we have found instances when a vendor’s forms offer insufficient protection.
As Delta found out the hard way, a proactive review and potential replacement of vendor-provided forms can be a very worthwhile endeavor. For additional information on model FCRA authorization and disclosure forms, please refer to our previous alert.
The contents of this Alert are for informational purposes only and do not constitute legal advice. If you have any questions about this Alert, please contact the Shulman Rogers attorney with whom you regularly work or a member of the Shulman Rogers Employment and Labor Law Group.
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