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Written By ESR News Blog Editor Thomas Ahearn
In August of 2021, the United States District Court for the District of Oregon ruled in the case of Walker v. Fred Meyer, Inc. that alleged violations of the federal Fair Credit Reporting Act (FCRA) that regulates background checks for employment purposes and held that the defendant’s disclosure notice was “clear and conspicuous” as required under the FCRA and its failure to comply with the FCRA’s “standalone” requirement was not “willful.”
Plaintiff Walker was hired by defendant Fred Meyer in March of 2017 and his employment was terminated in April of 2017 due to information uncovered during his background check. Plaintiff filed a lawsuit claiming the defendant violated the FCRA “standalone” requirement by including extraneous information in their background check disclosure form, which in this case was an explanation of the applicant’s rights under federal and state law.
Under FCRA section § 1681b(b)(2)(A)(i), an employer may not procure a “consumer report” – the FCRA definition for a background check for employment purposes – unless “a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes.”
The District Court dismissed the FCRA lawsuit in June of 2018, but the United States Court of Appeals for the Ninth Circuit affirmed in part and reversed in part the decision in March of 2020. The Ninth Circuit adopted a “concise explanation” standard to judge when an employer’s consumer report disclosure form may violate the FCRA and found disclosure forms may include a brief explanation about the reports and how they may be used.
On remand to the District Court, the defendant argued its FCRA violation was not “willful” since the “standalone” disclosure requirement was ambiguous when the plaintiff applied for a job in 2017. A magistrate judge agreed and recommended granting summary judgment to the defendant, noting the Ninth Circuit’s opinion defined the term “disclosure” in the FCRA for the first time. A district court judge approved and dismissed the case.
The FCRA 15 U.S.C § 1681 was enacted by Congress in 1970 to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies (CRAs), protect consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, and regulate the collection, dissemination, and use of consumer information, including consumer credit information.
Employment Screening Resources® (ESR) – a leading global background check provider that was ranked the number one screening firm by HRO Today in 2020 – offers employers comprehensive and FCRA compliant background screening services and provides them with the tools, skills, knowledge, and resources necessary to assist them in making informed hiring decisions. To learn more about ESR, visit www.esrcheck.com.
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.
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