Court Rules FCRA Prohibits All Extraneous Information in Background Check Disclosure Forms

Written By ESR News Blog Editor Thomas Ahearn

On January 29, 2019, the Ninth U.S. Circuit Court of Appeals issued an opinion in Gilberg v. California Check Cashing Stores that the federal Fair Credit Reporting Act (FCRA) prohibits any and all extraneous information in required FCRA background check disclosures, even information about rights under state laws.

FCRA Background Check Disclosures

The court held that an employer violates the FCRA’s “standalone document” requirement by including extraneous information about state disclosure requirements in the disclosure, as well as the “standalone document” requirement of California’s Investigative Consumer Reporting Agencies Act (ICRAA).

Enacted by Congress in 1970, the FCRA requires employers who obtain a “consumer report” on a job applicant to provide the applicant with a “clear and conspicuous disclosure” that they may obtain such a report “in a document that consists solely of the disclosure” before procuring the report.

Plaintiff Desiree Gilberg applied for a job with the defendant California Check Cashing Stores and was given a document entitled “Disclosure Regarding Background Investigation” which informed her about a required employment background check and provided her with information about the FCRA and ICRAA.

The FCRA and ICRAA protect the rights of employment candidates and employees when the employer seeks a consumer report, commonly known as a background check, conducted by a third-party screening firm. The Court opinion is at www.esrcheck.com/file/gilberg-v-california-check-cashing-stores-17-16263.pdf.

The number of consumer complaints filed involving the FCRA reached 4,531 in 2018, and have risen in number every year since 2011, making the FCRA the only consumer statute that has continued to increase in lawsuits filed, according to the latest report from WebRecon CEO Jack Gordon.

Lawsuits involving FCRA background check disclosures that have settled for millions of dollars include Delta Air Lines paying $2.3 million in January 2019, Omincare paying $1.3 million in August 2018, a subsidiary of PepsiCo paying $1.2 million in July 2018, and Frito-Lay Inc. paying $2.4 million in April 2018.

Costly class action lawsuits involving the FCRA are just one of the many compliance concerns for employers performing background checks and this trend was chosen by global background check firm Employment Screening Resources® (ESR) as one of the “ESR Top Ten Background Check Trends” for 2019.

ESR White Papers on FCRA Lawsuits

Employment Screening Resources® (ESR) offers two complimentary white papers that examine the many causes behind FCRA lawsuits: “Common Ways Prospective or Current Employees Sue Employers Under the FCRA” and “Common Ways Consumer Reporting Agencies are Sued Under the FCRA.”

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

© 2019 Employment Screening Resources® (ESR) – Making copies or using of any part of the ESR News Blog or ESR website for any purpose other than your own personal use is prohibited unless written authorization is first obtained from ESR.


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