Two recent decisions by the U.S. Court of Appeals for the Ninth Circuit have demonstrated how important it is for employers to take the proper steps to remain compliant with the Fair Credit Reporting Act (FCRA) when obtaining and using consumer reports for employment purposes. Employers should 1. Disclose in writing, in a standalone document, that a report will be obtained, 2. Obtain written authorization, 3. If “adverse action” is considered based upon results, notify the applicant of the results of the report and provide a copy of the “Summary of Your Rights Under the Fair Credit Reporting Act,” 4. Allow sufficient time for the applicant to review and/or challenge and 5. Provide required documentation when adverse action is taken. Violations of the FCRA could lead to significant fines and possible punitive damages.
