Tag: California FCRA

California FCRA Rulings Protect Against Claims of Technical Violations April 12, 2023 Employers have achieved a significant win in the California Courts of Appeal. According to a challenge over technical violations under the Fair Credit Reporting Act (FCRA), the Fifth Appellate District has ruled in favor of the employer. This ruling could set a strong precedent that applicants and employees lack standing to sue for FCRA in a state court in the absence of concrete injuries. In this case, the plaintiff received a set of disclosure forms authorizing a background check as a condition of employment. After completing the background check, the company hired the plaintiff without issues related to the completed report. However, the plaintiff filed a lawsuit against the employer in federal court after his employment ended. In the case, he alleged that the company violated the FCRA. The FCRA governs and provides several requirements regarding background checks. For example, under the FCRA, employers must provide a “clear and conspicuous” disclosure. This disclosure must stand alone and state that the company would obtain a consumer report before the background check. In addition, the FCRA explicitly warns that employers cannot combine the disclosure with other documents or contain extraneous information. The plaintiff alleged that the employer violated these requirements by extraneous information in the report. According to the case, the irrelevant information included both a release of liability and state disclosures. As a result, the disclosure confused him about his rights under the FCRA. Initially, the plaintiff filed this case in the U.S. District Court for the Eastern District of California. However, the court dismissed it without prejudice for lack of Article III standing. As such, the plaintiff refiled it in a California state court. In a first-of-its-kind ruling, the court dismissed the case for lack of standing. Surprisingly, the Fifth Appellate District affirmed this ruling from the trial court. The Fifth Appellate District found that “an informational injury that causes no adverse effect is insufficient to confer standing upon a private litigant to sue.” Although the courts affirmed that the state courts are not limited by the requirements of Article III, standing plaintiffs generally must be “beneficially interested” to pursue a claim. In the case of the FCRA’s statutory damages provision, the Fifth Appellate District found that the regulation intends not to penalize a company for violations. Instead, it determined that it meant to provide redress in cases where damages are “difficult or impossible to quantify or prove.” The plaintiff later appealed this ruling to the California Supreme Court. However, the court rejected the petition for review and a request for republication. As a result, this precedent will hold and could drastically limit the plaintiff’s ability to sue for technical violations of the FCRA. Despite this success, employers should remember to always comply with the FCRA to prevent potential liability. One of the best ways to do this is to partner with a trustworthy, FCRA-compliant employment screening provider. Ready to discover more about Pre-employ’s background checks? Speak to a Sales Rep today. Source

Tag: California FCRA

California FCRA Rulings Protect Against Claims of Technical Violations

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