Ninth Circuit – Background Check Decision

If you do not use some type of background check, you are exposing yourself to a potential negligent hiring claim, theft, workplace violence, or drug abuse.

But doing it wrong could get you in a world of trouble.

The Fair Credit Reporting Act requires employers who obtain a consumer report on a job applicant to first provide the applicant with a “clear and conspicuous disclosure” that the employer may obtain such a report, and to provide this disclosure “in a document that consists solely of the disclosure.”

The courts have generally leaned toward favoring employees.  But two recent rulings from the Ninth Circuit Court of Appeals should give some comfort to employers. Here are the takeaways:

  1. The employer background check disclosure given to a prospective employee must be a stand-alone document without any extraneous language. (Keep it simple; do not clutter it up with other information).
  2. If you are going to deny employment based on the information in the background check report, you must give a notice of adverse action. This notice indicates which reporting agency was used and how to contact them.
  3. The prospective employee has a right to dispute the information in the background check report – but with the reporting agency, not with the employer.
  4. The employer may present a stand-alone background check disclosure at the same time that other employment application documents are given to the prospective employee.
  5. Authorization to conduct a background check does not have to be in the disclosure but can be at the end of the employment application.

If you want to make sure you are doing background checks correctly, call us today. An ounce of prevention is worth a pound of cure.