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Employee Must Dispute Background Check Finding With Credit Agency, Not Employer

    Client Alerts
  • April 22, 2020

Under the federal Fair Credit Reporting Act (FCRA), applicants or employees undergoing background checks must be given notice of their rights prior to the check being run, and they must provide advance consent to the search. If the employer takes adverse action against the subject of the search based on its results, he or she must be given notice and an opportunity to contest the results with the company that conducted the search.

In Walker v. Fred Meyer, Inc., a new decision from the Ninth Circuit Court of Appeals, an employee claimed that the FCRA also provides employees and applicants the right to directly contest the results of the background check with the employer. The plaintiff’s job offer was revoked after the defendant received the results of a background check. He sued under the FCRA, claiming that the defendant’s FCRA disclosures contained extraneous information and therefore violated the law’s requirement that such disclosures be clear and concise. He also alleged that the defendant violated the FCRA by refusing to discuss the search results with him.

On appeal, the Ninth Circuit held that the FCRA notice should be limited to basic information about the search and its purposes. However, the employer may add additional information that is directly related to these required disclosures. The court then found that while the FCRA requires the credit agency to receive complaints about the accuracy of the search results, this does not apply to the employer. Plaintiffs must take their issue up with the credit agency.

Employers that draft their own FCRA advance notice and consent forms should review them in light of this opinion. If employers rely on their background search services to provide the forms, they should review them and ask the service about any needed changes.