Employers seeking to conduct background checks on job applicants have a legal obligation to comply with the Fair Credit Reporting Act (FCRA). This act requires that employers provide clear and conspicuous disclosures to job applicants and obtain written authorization from them before conducting a background check.
Recently, the U.S. District Court for the Northern District of California examined a case that explores the disclosures and their compliance with the FCRA. In Keefer v. Ryder Integrated Logistics, Inc., a plaintiff claimed that the defendant violated the FCRA by not having disclosures that were clear and conspicuous and in a standalone document. However, the district court rejected this claim, granting the employer’s motion for summary judgment.
The case centers around a hiring process in which the plaintiff was provided with a disclosure and authorization form for the employer to conduct a background check. The disclosure stated, “By signing below, you hereby authorize the Company to procure report(s) on your background as described above from any third party or consumer reporting agency contacted by the Company.” The plaintiff argued that the disclosure was not clear and conspicuous and was not presented in a standalone document as required by the FCRA.
The district court disagreed with the plaintiff’s arguments, finding that the disclosure satisfied the “clear and conspicuous” requirement of the FCRA. Specifically, the court determined that the use of the term “the Company” did not create excess confusion and that the disclosure was “readily noticeable” to the consumer despite the use of multiple disclosures in the same document.
The plaintiff further argued that extraneous information on the disclosure and authorization form, such as the Ryder Integrated logo and trademark, navigation buttons, and an “Application FAQs” hyperlink, violated the standalone document requirement of the FCRA. However, the district court rejected these claims and ultimately ruled in favor of the employer, finding that the disclosure complied with the FCRA.
The Keefer v. Ryder Integrated Logistics, Inc. case serves as an important reminder for employers to ensure that their background check disclosures comply with the FCRA. While the FCRA allows for some helpful information to be included in the disclosure, it’s essential to ensure that the disclosure is clear, conspicuous, and presented as a standalone document to avoid potential legal challenges.
It’s cheaper to avoid litigation than it is to win. When is the last time you reviewed your screening program?