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California Supreme Court Ruling Reinforces the Importance of Consent in Background Checks

By Michael Klazema on 9/12/2018

A recent state Supreme Court ruling in California has reinforced the importance of consent for employment-related background checks. Per a report from HRDive.com, the ruling involved the case Connor v. First Student, Inc. On August 20, the California Supreme Court ruled a prior ruling passed down by a lower court would stand. The ruling found First Student, a school bus transportation company, failed to follow required protocols for obtaining background check consent for some 54,000 bus drivers.

Typically, rulings of this ilk involve the Fair Credit Reporting Act (FCRA), which sets forth federal requirements for notifying subjects of background checks, obtaining their consent, and making adverse employment decisions based on those checks. This ruling concerned a different piece of legislation: the California Investigative Consumer Reporting Agencies Act (ICRAA).

Many ICRAA requirements overlap with FCRA requirements. Under the ICRAA, no employer can order a background check or credit check from a third-party agency without first notifying an applicant or employee and securing written consent. As is the case under the FCRA, this disclosure must be provided in a standalone form and not bundled with other application materials.

One point of difference is the ICRAA allows an applicant to request a copy of the background check report up front. The ICRAA also dictates the information that must be incorporated into the disclosure, including the name, contact information, and website of the agency that will be preparing the report.

The point of contention at the heart of the California Supreme Court case is whether the ICRAA was “unconstitutionally vague.” In addition to the FCRA, the ICRAA overlaps with another California law: the Consumer Credit Reporting Agencies Act (CCRAA). The CCRAA does not require employers to go through disclosure or consent steps for background checks.

First Student complied with the CCRAA but not with the ICRAA and argued the setup of legislation in the state is confusing. The court ruled the legislative overlap was not enough to render the ICRAA “unconstitutionally vague” or to give First Student a pass for failing to follow the law.

This ruling shows courts are not giving leeway to companies that fail to understand their legal obligations. While laws like the ICRAA and the CCRAA in California can make compliance more confusing or complex for employers, it doesn’t change employer obligations: companies need to be vigilant in understanding their legal requirements based on geography. Even without these laws, First Student would still likely have violated the FCRA’s federal requirements for background check disclosure and consent.

For businesses trying to learn more about background check laws and the importance of compliance, the backgroundchecks.com Learning Center is a valuable resource. Among other features, we offer detailed articles about the FCRAthe Equal Employment Opportunity Commission (EEOC)ban the box laws, and other agencies and legislative requirements that cover background check compliance. You can access any of the content on our Learning Center or anything on our blog free of charge.

 

Sources: https://www.hrdive.com/news/employers-must-get-permission-before-performing-background-checks-in-califo/530533/

https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/californiaexternalagencies.aspx



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