The last year has been filled with plaintiffs bringing actions under Section 604(b)(2) for an employer's failure to provide the consumer with “a clear and conspicuous disclosure . . . in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes.” The FCRA requires this disclosure to be in a completely standalone document, without any extraneous information. The Federal Trade Commission (FTC) and the courts have made clear that Section 604(b)(2) allows the authorization to be part of this standalone disclosure form, but it should not contain any additional information.
Employers are being targeted for using employment applications that include extraneous information in the disclosure and authorization form, including employment-at-will language, release information, liability waivers, shipping information and advertisements. Although some of these employers were using the services of a third-party vendor, it did not protect them from lawsuits for a failure to have a standalone form. Thus, employers should conduct this review of their FCRA disclosure and authorization form regardless of where the form is hosted, whether it be on the employer's own website or through a third-party vendor, including Truescreen
In addition, employers should be mindful of always using the most current "Summary of Your Rights" form as well as any applicable state forms. These forms are required to be provided when the consumer signs the disclosure and authorization form, as well as when pre-adverse and adverse action letters are sent to the consumer. The CFPB published an updated "Summary of Your Rights" form in October 2014, which is available here.
For additional information on the FCRA's standalone disclosure/authorization form requirements, see our previous Compliance Issue Analysis publications: "Disclosure & Authorization Form Under the FCRA: It is Not a Release" and "FCRA Compliance and Third-Party Applicant Tracking Systems."
Posted: January 26, 2015