Privacy Issues in the Workplace

The FCRA governs the requisition, distribution, and use of “consumer reports,” which, by definition, must be prepared by a “consumer reporting agency”:

 A “consumer report” is statutorily defined as “any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living” which is used or expected to be used for, among other purposes, “employment purposes.” 48  The FCRA defines “consumer reporting agency” as “any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility on interstate commerce for the purpose of preparing or furnishing consumer reports.” 49

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. 50 Damages are available for willful and negligent violations of the FCRA. 51 However, employers should note that liability may be avoided in certain cases where reasonable procedures are developed by an employer to assure compliance. 52 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. 54 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. 55 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. In Syed v. M-I, LLC 53 , 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,

Privacy Issues in the Workplace ©2019 (s) Liebert Cassidy Whitmore 21