Employers who use third party vendors to perform background checks on prospective employees must comply with the Fair Credit Reporting Act (FCRA) and California’s Investigative Consumer Reporting Agencies Act (ICRAA). The FRCA and ICRAA require employers to give specific and analogous disclosures about an applicant’s rights under the applicable laws and obtain express consent. Because of the similarities, many employers simplify the forms and use a single disclosure and consent form that explains federal and various state laws. This was common and acceptable practice before the Ninth Circuit’s decision in Gilberg v. Cal Check Cashing Stores, LLC, No. 17-16263, 2019 WL 347027 (Ninth Cir. Jan. 29, 2019).


Under the holding in Gilberg, such a practice is no longer acceptable nor allowed. The court in Gilberg held a single form combining nearly identical federal and state disclosures violates both federal and state laws. As a result, employers who conduct pre-employment background checks must now provide applicants with two separate standalone forms: 1) disclosure and consent under FCRA; and 2) disclosure and consent under California’s ICRAA (or other applicable state law). The court came to its conclusion based on the language in both the FCRA and ICRAA. Under FCRA, employers must provide applicants with a “clear and conspicuous disclosure” and the disclosure must be “in a document that consists solely of the disclosure.” This last part is referred to as the “standalone document requirement.” The ICRAA similarly, requires that employers wishing to obtain a consumer report concerning prospective employees to “provide a clear and conspicuous disclosure in writing to the consumer at any time before the report is procured or caused to be made in a document that consists solely of the disclosure.” Accordingly, both the FCRA and ICRAA require the employer to provide such disclosures in standalone forms.


Failure to follow FCRA carries a significant risk for the employer. FCRA allows plaintiffs to recover actual damages, costs, and attorney’s fees. If the alleged FCRA is found to be “willfull,” plaintiffs may recover statutory damages up to $1,000 per violation.

Failure to follow ICRAA is similarly substantial. Both the third-party vendor issuing the report and the employer using the report may be liable for actual damages or $10,000, per violation, whichever is greater. Attorney’s fees and costs may be rewarded to a prevailing plaintiff alleging a violation of ICRAA.


Here, at Garcia & Gurney, ALC, we have experienced employment law attorneys that have comprehensive knowledge on drafting disclosure forms for background checks. We additionally can conduct background checks if needed. Call us at 925-468-0400 for more information on this or any other employment related matters and to schedule your initial consultation with one of our attorneys.


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