Privacy Issues in the Workplace

A reference check that is performed by an employer, and is not performed by a consumer reporting agency, does not fall within the definition of a consumer report and is not governed by the FCRA. Public employers are generally not consumer reporting agencies. On the other hand, if an employer hires a third party, such as a private investigator, to conduct its background and/or reference checks, that person or entity likely meets the definition of a consumer reporting agency. 51 Damages are available for willful and negligent violations of the FCRA. 52 However, employers should note that liability may be avoided in certain cases where reasonable procedures are developed by an employer to assure compliance. 53 the employee, Syed, was required to waive his right to bring a FCRA claim against his prospective employer as part of signing FCRA disclosure form that permitted the prospective employer to perform a background check on him. The Ninth Circuit held that the inclusion of a liability waiver in the disclosure form was a willful violation of the FCRA. 55 The Ninth Circuit also suggests that the inclusion of any extraneous language in a FCRA disclosure form could be construed as a willful violation of the FCRA. 56 Thus, districts should use care in drafting disclosure forms under the FCRA and make sure that applicants are not required to waive any rights to use the district by signing the form. Recommendations:  Agencies should examine their background check disclosure forms and on-line application forms to make sure that their disclosure forms are limited to disclosures and do not contain liability waiver language or extraneous language.  If an agency uses a form provided by a third party (e.g., its outside background investigator), the agency should make sure that the disclosure form is limited to disclosures and does not contain any liability waiver language or extraneous language.  If a question exists as to whether language in the form is appropriate, the agency should consult with legal counsel. i. Affirmative Obligations on Employer If an employer is or utilizes a consumer reporting agency to conduct a reference or background check, it must undertake the following:  Within three (3) days of requesting a report, the employer must make a “clear and conspicuous disclosure” to the applicant in a document that consists solely of the disclosure that a consumer report may be obtained for employment purposes. 57 In Syed v. M-I, LLC 54 , the Ninth Circuit held that the inclusion of a liability release in an employment background check disclosure form is a willful violation of the FCRA. In that case,

 The applicant must provide written authorization to procure the report. 58

 The employer must certify in writing to the consumer reporting agency that the required disclosures have been made to the applicant, that the applicant has provided written authorization to procure the report, that the information in the report will not be used in violation of any applicable Federal or State equal employment opportunity law or regulation. 59

Privacy Issues in the Workplace ©2021 (s) Liebert Cassidy Whitmore 22