The Ninth Circuit Court of Appeals has held that an employer willfully violates the Fair Credit Reporting Act (“FCRA”) by including a liability waiver on a background check disclosure and consent form that it provides to prospective employees.

In Syed v. M-I, LLC the Court concluded, based on the express language of FCRA an employer must disclose its intent to secure a consumer report for employment purposes and inform the consumer of his or her FCRA rights. The information must be in writing in a document “consisting solely of the disclosure” but can also include the consumer’s authorization to procure the report in the same document as the disclosure.

In Syed, the employer also included that stated the applicant by signing the form agreed to release the employer from liability stemming from the employer’s reliance on information derived from the consumer report. The Ninth Circuit determined that the inclusion of this
language violated FCRA and that the violation was “objectively unreasonable” and “willful.” The employer, thus, faces liability for statutory and punitive damages.

If you use background checks in your employee applicant vetting contact your attorney to ensure your forms do not improperly include “extraneous” information and do comply with FCRA.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.