NEW CASE: 9th Circuit Court Appeals Rules Federal And State Background Check Disclosure Forms Are Required In California

In a recent decision (Gilberg v. California Check Cashing Stores, LLC), the Ninth Circuit Court of Appeals has held that employers must provide its applicants and employees with separate federal and state Fair Credit Reporting Act (FCRA) disclosure forms. The FCRA requires a “stand alone” disclosure that is “clear and conspicuous.” In other words, the combining any state disclosure notice with the FCRA would be a violation of the law.

This issue was brought to light when an undisclosed party issued a disclosure notice which combined the FCRA disclosure with several short paragraphs outlining the rights of applicants in seven other states, that included California. The Ninth Circuit confirmed to satisfy the FCRA “stand alone” document requirement the notice form must consist solely of the FCRA disclosure. It further clarified that the FCRA disclosure cannot be combined into a single document with the employees written authorization to conduct the background check.

Employer Takeaway

Employers who operate in the following states Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington should ensure that their disclosure forms are compliant with the Ninth Circuit’s recent ruling on the matter.

In addition, employers operating in other states or who utilize a third party must ensure they are compliant as well. Failing to comply can prove to be costly to an employer due to possible fines and litigation.