Privacy Issues in the Workplace

The requirements of the Act are triggered when an employer utilizes an “investigative consumer reporting agency” (ICRA) to prepare an “investigative consumer report” regarding a “consumer”:

 An ICRA is statutorily defined as “any person who for, monetary fees or dues, engages in whole or in part in the practice of collecting, assembling, evaluating, compiling, reporting, transmitting, transferring, or communicating information concerning consumers for the purposes of furnishing investigative consumer reports to third parties, but does not include any governmental agency whose records are maintained primarily for traffic safety, law enforcement, or licensing purposes . . .” 69  An investigative consumer report is a “report in which information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through any means . . .” 70 Reference checks commonly address the character, reputation, and mode of living of prospective employees and would appear to meet the definition of an investigative consumer report. However, for the purpose of AB 22’s limitation on the job positions for which a credit report may be sought, “consumer credit report” does not include a report that (a) verifies income or employment and (b) does not include credit-related information, such as credit history, credit score, or credit record. 71

Any third party who is hired to conduct reference checks on behalf of an employer would appear to meet the definition of an ICRA.

i. Employer Obligations When a Reference Check is Conducted By an ICRA When a background investigation is conducted by an ICRA instead of being conducted in-house there are numerous restrictions on the conduct of the investigation.  The Act requires an ICRA to permit a consumer to inspect its files, “except that the sources of information, other than public records and records from data bases available for sale, acquired solely for use in preparing an investigative consumer report and actually used for no other purpose need not be disclosed.”  At any time before the report is procured or caused to be made, the employer must make a “clear and conspicuous disclosure” to the applicant in a document that consists solely of the disclosure that: (i) An investigative consumer report may be obtained, (ii) the permissible purpose of the report is identified, (iii) the disclosure may include information on the consumer’s character, general reputation, personal characteristics, and mode of living, (iv) identifies the name, address, and telephone number of the investigative consumer reporting agency conducting the investigation, and (v) notifies the consumer in writing of the nature and scope of the investigation requested, and also including a summary of the right to inspect the report.  Also, the employer must “provide the consumer a means by which the consumer may indicate on a written form, by means of a box to check, that the consumer wishes to receive a copy of any report that is prepared. If the consumer wishes to receive a copy of the

Privacy Issues in the Workplace ©2019 (s) Liebert Cassidy Whitmore 24