Two weeks ago, the U.S Court of Appeals for the Ninth Circuit held in Gilberg v. California Check Cashing Stores, LLC that a federal background check disclosure form that also included state law notices violated the Fair Credit Reporting Act’s (FCRA) requirement that the FCRA disclosure be made in a document consisting “solely of the disclosure.”

In the process of applying for employment, the plaintiff-applicant signed a form entitled “Disclosure Regarding Background Investigation.” This form contained the required FCRA disclosure language, as well as other notices required under various state laws (including New York, Maine, Oregon, Washington and California). These separate state law notices appeared below the FCRA language, and indicated that they applied only to applicants in certain states (stating, for example, “New York and Maine applicants or employees only” before the state-specific disclosure language).

The plaintiff-applicant filed a putative class action alleging the employer failed to make a proper disclosure under the FCRA and under California law. The FCRA prohibits an employer from obtaining a consumer report without first providing a “clear and conspicuous” written disclosure that a consumer report may be obtained for employment purposes. The FCRA also requires that employers provide this disclosure in a document that consists “solely of the disclosure,” without extraneous information.

Citing its 2017 decision in Syed v. M-I, LLC, in which the court held that the inclusion of a liability waiver in a FCRA disclosure form violates the FCRA’s requirement that the document consist “solely” of the disclosure, the Ninth Circuit held that the inclusion of state law disclosure language violated the FCRA and California law’s standalone document requirement. In addition, the Ninth Circuit held that the disclosure form was not “clear” for two reasons: First, the court found that a reasonable person would not understand the disclosure due to its confusing sentence structure and reference to an “all-encompassing” authorization. Second, the court found that the form’s inclusion of both federal and state law disclosure language would confuse a reasonable reader.

Notably, the FCRA does not require that potential plaintiffs show that they were actually damaged by a technical violation of its requirements in order to proceed. Statutory damages of up to $1000 per violation are available if a plaintiff can prove that the defendant's violation of law was willful, and courts have regularly allowed such claims to proceed on a class-wide basis.

The Ninth Circuit decision is the first decision of a federal appeals court to hold that inclusion of required state law notices violates the FCRA's requirements. However, employers in all states should review their FCRA disclosure forms to ensure that they do not include extraneous information, such as liability waivers. Based on this federal appellate decision, it may even be prudent to separate state-mandated information from the federally-required disclosure.