On March 11, 2015, a district court in the Eastern District of Virginia denied an employer’s motion for summary judgment in a Fair Credit Reporting Act case dealing with the inclusion of release language in a background check disclosure. Employers should review this decision carefully as the case law on this issue develops further.
In Milbourne v. JRK Residential America, LLC, the plaintiff argued that the disclosure form at issue did not comply with the FCRA’s requirement that an employer disclose to an applicant, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes. The plaintiff claimed that the disclosure violated this “solely of the disclosure” requirement because it included a liability release, releasing several parties from “any liability in connection with any information they give or gather and any decisions made concerning my employment based on such information.”
The Court denied the employer’s motion for summary judgment, finding that the disclosure did not clearly satisfy the “letter and spirit of the FCRA.” According to the Court, the text of the FCRA alone does not allow the “inclusion of a waiver within the document containing the disclosure.” The Court found that its decision was supported by informal Federal Trade Commission advisory opinion letters and the text of the FCRA itself.
The Court also refused to grant the employer’s motion for summary judgment on the issue of willfulness. Under the FCRA, a plaintiff cannot recover statutory damages if the violation was not willful. In this case, the Court determined that deciding willfulness issues was premature because willfulness was a “fact-driven inquiry” that required further discovery.
As the body of law on background check disclosures continues to develop, employers should be prepared to respond to the changing legal landscape. Troutman Sanders has extensive experience defending FCRA lawsuits involving claims related to background check disclosures and crafting compliance strategies that mitigate the risk of lawsuits in the future.