Authored by attorney Megan B. Caramore
Are the background check disclosure forms used as part of your hiring process exposing you to risk of litigation? Perhaps. A number of class action suits are currently pending on this issue. The Fair Credit Reporting Act (FCRA) requires that employers disclose to applicants and employees whether a consumer report may be obtained before that report is requested. The FCRA also requires that the disclosure must be in writing, clear and conspicuous, and in a document that consists solely of the disclosure. The last requirement is sometimes referred to as the “stand-alone” requirement and it forms the basis for the current litigation.
The problem is that while the FCRA specifies that written authorization from the applicant or employee may be included with the disclosure form, it does not specify what other information may be included. As such, the class action plaintiffs allege that any other information on the form renders it noncompliant with the Act. To lessen the risk of litigation avoid the following, which may be problematic:
If your forms put you at risk of being pulled into litigation, exposure may be significant. In addition to the time, hassle, and attorney fees involved, the FCRA provides for statutory damages of between $100 to $1,000 for each class member provided with a non-compliant form, plus possible punitive damages. While the final results of the litigation are not yet known, review your FCRA forms now to make sure that they contain only the required disclosure and written authorization and nothing more. If your forms do contain additional information, consider moving that extra wording to a different document altogether. Additionally, don’t assume that forms provided by a background screening company will protect you because the terms of your service contract may limit the screening company’s liability.
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