The Fair Credit Reporting Act regulates more than credit. It includes provisions that govern employers who obtain consumer reports on applicants in connection with the application process. One such provision deals with the disclosure that an employer must provide to an applicant before obtaining a background check. According to the FCRA, the employer must provide the applicant with a clear and conspicuous disclosure, consisting solely of the disclosure, that a background check will be obtained. In recent years, plaintiffs’ counsel have been developing new, different, and frequently more extreme, theories as to why employers’ documents are not “standalone” disclosures. In Reed v. CRST Van Expedited, Inc., the District Court for the Middle District of Florida rejected one such theory.
In that case, Walter Reed alleged that he interviewed for a trucking position but was not informed that a background check would be procured on him. In response, CRST filed a motion to dismiss, to which it attached Reed’s employment application and the disclosure that he signed. The document included information about the content of the consumer report, Reed’s right to request a copy of the report, Reed’s right to dispute the report, and the companies potentially generating the report. It also included a statement that CRST would provide additional notices.
In analyzing Reed’s claim, the court held that CRST’s disclosure was “clear and conspicuous” and consisted “solely of the disclosure.” The court implicitly concluded that the existence of the information discussed above did not render the disclosure not “standalone.” In other words, the court found that a background check disclosure could inform the consumer of information that is germane to the obtainment and use of the consumer report, while still complying with the “solely of the disclosure requirement.”
The court’s decision in Reed is significant because it applies a commonsense approach to the FCRA’s background check disclosure requirement. While some courts have applied highly technical approaches to what constitutes a “standalone” disclosure, the Reed court implicitly held that a disclosure that informs a consumer that a background check will be obtained, while also including relevant information pertaining to that background check, does not violate the FCRA.
The FCRA poses many traps for unwary employers. In its well-reasoned approach to what constitutes a “standalone” disclosure, the court in Reed prevented the creation of another such trap.