Tag: Willfulness standard

California Appeals Court Rules on FCRA’s “Willfulness” Standard A California Court of Appeals has recently addressed the “willfulness” standard regarding violations of the Fair Credit Reporting Act (FCRA), a federal law regulating consumer reports. The court found a triable issue of fact regarding whether an employer’s unintentional inclusion of extraneous material in an FCRA mandated disclosure for a background check was “intentional” or “reckless,” therefore potentially meeting the willfulness standard under the FCRA. Under the FCRA, employers are required to obtain permission from candidates for employment before performing a background check. In order to receive this authorization, employers must provide applicants with a “standalone” disclosure which must solely consist of the FCRA compliant notice and disclosure. This requirement for a standalone disclosure has resulted in a considerable amount of litigation in recent years, and one of the most critical issues in these cases is whether or not the violation is “willful.” According to the precedent set by the U.S. Supreme Court, in order for a violation to be considered willful, a plaintiff must show that the conduct leading to the violation was either “intentional” or “reckless.” If a violation is shown to be willful, it can result in significant liability, including statutory damages of up to $1,000 per violation. In this recent case, the plaintiff filed a lawsuit alleging that a major bookseller had willfully violated the FCRA by providing extraneous materials in its FCRA disclosure form that is provided to applicants on its online hiring application. This extraneous material was the result of a legal disclaimer provided to the employer with the disclosure form by a third party, which was unintentionally included with the final public-facing form. The employer moved for summary judgment, arguing that no reasonable jury could find that the drafting error that resulted in the mistake was a willful violation of the FCRA. The trial court agreed with the defendant and granted the motion for summary judgment. However, the plaintiff appealed this ruling, and the Appeals Court reversed and remanded the case. In the court’s review, it found that one of the employer’s workers had been aware of this extraneous language when reviewing the disclosure prior to its use and continued to use the disclosure for almost two years. In its defense, the employer argued that the employee who reviewed the disclosure was not a lawyer and had limited knowledge of the FCRA’s requirements. The court was not persuaded by this argument and found that by delegating its compliance responsibilities to an untrained HR employee who, by its own argument, had little knowledge of the FCRA, a jury could conclude that the defendant’s behavior was reckless. The defendant also argued that because it did not receive complaints from job applicants concerning the extraneous language, it had no reason to be aware of the violation; however, the court similarly rejected this argument finding that the extended period of time the disclosure form was used could indicate recklessness due to the lack of a system for ensuring FCRA compliance. This case indicates the importance of proactively working to ensure compliance with the FCRA when conducting background checks for employment. The best way to do this is to work with a quality employment screening provider who can assist with ensuring adequate procedures are in place to ensure compliance with all applicable federal and state laws. Pre-employ offers free resources to help you stay compliant with your hiring practices. Check out our guide on 5 Tips To Avoid FCRA Non-Compliance to keep your company up-to-date. Source

Tag: Willfulness standard

California Appeals Court Rules on FCRA’s “Willfulness” Standard

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