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June 28 2018

Credit Checks: When a Disclosure Form Must "Stand Alone

Recent cases involving the Fair Credit Reporting Act (FCRA) emphasize the importance of employers allowing disclosures to obtain background checks from consumer reporting agencies to "stand alone" from every other document. While the FCRA allows the disclosure form to also include an authorization, courts have recently cracked down on employers who include anything extraneous. In Syed v. M-I, Ltd. Liab. Co., 853 F .3d 492 (9th Cir. 2017), the Ninth Circuit of Appeal held that the inclusion of a liability waiver in the same document at the FCRA disclosure violated the "stand-alone" requirement.
In another case, Petco Animal Supplies, Inc., asked a Federal Court in the Southern District of California to approve a class-wide settle of a 2016 lawsuit based on allegations that its web-based application contained an FCRA disclosure containing a broad authorization of "any person" to provide "any and all information" to the consumer reporting agency, in addition to information relating to the laws of seven different states.