Ninth Circuit: FCRA Does Not Require Disclosure to be Distinct in Time from Other Employment Documents
The Ninth Circuit recognized that plaintiff’s argument was novel but was thwarted by the statute itself. Plaintiff below, argued on behalf of a class, that the company violated the Fair Credit Reporting Act (FCRA) by presenting the FCRA disclosure at the same time the company presented other separate documents. The District Court granted summary judgment and the Ninth Circuit affirmed. Luna v. Hansen and Adkins Auto Transport, Inc., No. 18-55804 (9th Cir. Apr. 24, 2020).
The FCRA does not allow procurement of a consumer report for employment purposes unless “a clear and conspicuous disclosure has been made in writing to the consumer . . . in a document that consists solely of the disclosure.” 15 U.S.C. §1681b(b)(2)(A)(i).
A former employee of a vehicle transportation business received a Commercial Driver Employment Application. This application was a multi-form, multi-page document that included notices and authorizations permitting the company to retrieve safety history and driving records and to conduct drug and background checks. Job applicants signed two documents related to consumer reports. First, the disclosure document appeared on a separate sheet of paper and informed applicants, “[R]eports verifying [applicant’s] previous employment, previous drug and alcohol test results, and [applicant’s] driving record may be obtained on [applicant] for employment purposes.” The second document, the authorization, indicated that an applicant’s signature authorized the company or their subsidiaries or agents to “investigate [applicant’s] previous record of employment.” The authorization appeared at the end of the application and included other notices, waivers, and agreements that were not related to obtaining the consumer report.
The plaintiff filed a putative class action alleging the company’s hiring process violated disclosure and authorization requirements of the FCRA. The plaintiff alleged that because the disclosure was provided together with other application materials, the FCRA was violated. The Ninth Circuit disagreed, finding this argument “stretches the statute’s requirements beyond the limits of law and common sense.”
Further, while acknowledging a disclosure form cannot contain anything other than the disclosure itself, the Court held that no authority suggests that a disclosure must be distinct in time as well. The Court stated that if they were to accept the plaintiff’s argument that a FCRA disclosure cannot be presented together with other employment documents, “it is difficult to see how an employer could ever provide an applicant written application materials without violating FCRA’s standalone document requirement.”
As FCRA class action lawsuits continue to be filed at an increasing rate, the decision is worth a close reading by employers grappling with complying with the highly technical statute.