Employers Win in Recent Disclosure Form Rulings

The Ninth Circuit Court of Appeals remains busy during the global pandemic issuing key rulings for employers to consider including this ruling noting a “concise explanation” on the disclosure form is permissible.

No Evidence Disclosure Form Caused Confusion
Another important case from March 2020 addressed allegations that the employer’s disclosure form violated the Fair Credit Reporting Act (FCRA) along with a failure to receive “meaningful authorization” from the plaintiffs prior to submitting a background check request. Specifically, the plaintiffs’ claimed the employment application contained a disclosure and authorization form that included state law references and a liability waiver which allegedly made the forms confusing to understand.

In a rather brief opinion, the Ninth Circuit Court of Appeals analyzed the standing issue, distinguishing the current case from an oft-cited prior case Syed v. M-I-, LLC issued by the court in 2017. Specifically, the court cited the fact that discovery and depositions were already conducted in the current case, during which the plaintiffs failed to produce evidence that they suffered a concrete injury. Notable the plaintiffs failed to demonstrate they were confused by the inclusion of state law references and the liability waiver and that they would not have signed the form if it was a “sufficiently cleared disclosure”. Based on this lack of evidence proving an injury, the court determined there was no standing for the lawsuit to proceed.

No Time Requirements for Disclosure
In another win for employers from April 2020, the Ninth Circuit Court of Appeals affirmed the district court’s summary judgment finding in favor of the employer. The court determined an employer does not violate the FCRA by providing the disclosure simultaneously with other employment materials and by failing to place the authorization on a standalone document.

In this case, the plaintiff completed a commercial driver employment application that included notices and authorizations permitting the employer to retrieve safety history and driving records, along with drug and background checks. The court zeroed in on the fact that the disclosure was in a standalone document and that the FCRA does not impose any sort of time limit on when the disclosure can or should be presented to a candidate. The court also found the employer’s disclosure to be clear and conspicuous. Finally, the court determined the disclosure requirements do not apply to the authorization; rather an employer simply needs to obtain the authorization in writing.

Given the exorbitant amount of litigation on this issue, Asurint recommends employers have their disclosure and authorization forms reviewed at least once per year, if not more often, by qualified legal counsel.