Fair Credit Reporting Act

Written By ESR News Blog Editor Thomas Ahearn

On March 20, 2020, the United States Court of Appeals for the Ninth Circuit issued an opinion adopting a “concise explanation” standard to judge when an employer’s consumer report disclosure form may violate the federal Fair Credit Reporting Act (FCRA) that regulates background checks for employment purposes in America.

In Walker v. Fred Meyer, Inc., the Ninth Circuit found disclosure forms required before obtaining consumer reports under the FCRA may include a brief explanation about the reports, how they may be used, and that employers are not required to provide job applicants and employees opportunities to discuss consumer reports with them.

Plaintiff Daniel Walker claimed that the defendant Fred Meyer Inc. violated the FCRA by including additional information in their background check disclosure form. Walker said he was hired by Fred Meyer in March 2017 and his employment was terminated in April 2017 due to information on his background check.

The Ninth Circuit affirmed in part and reversed in part a district court’s dismissal of the case under the FCRA, which requires employers who obtain background checks on job applicants to provide applicants with a “clear and conspicuous disclosure” that is “in a document that consists solely of the disclosure.”

Under FCRA § 1681b(b)(2)(A)(i), an employer may not procure a consumer report for employment purposes unless “a clear and conspicuous disclosure has been made in writing to the consumer… in a document that consists solely of the disclosure that a consumer report may be obtained for employment purposes.”

The Ninth Circuit’s opinion written by Circuit Judge A. Wallace Tashima stated: We hold that beyond a plain statement disclosing “that a consumer report may be obtained for employment purposes,” some concise explanation of what that phrase means may be included as part of the “disclosure” required by § 1681b(b)(2)(A)(i).

In addition, Judge Tashima wrote: We also hold that the right provided by the FCRA to dispute inaccurate information in a consumer report does not require employers to provide job applicants or employees with an opportunity to discuss their consumer reports directly with the employer.

Enacted in 1970, the FCRA 15 U.S.C. § 1681 promotes the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies (CRAs), and was intended to protect consumers from the willful and/or negligent inclusion of inaccurate information in their reports.

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