FCRA Guidlines

On January 20, 2017, in an opinion issued for Syed v. M-I, LLC, the Ninth Circuit Court of Appeals ruled that employers can “willfully” violate the federal Fair Credit Reporting Act (FCRA). The criteria cited by the court was providing job applicants with a pre-employment background check disclosure that also includes a liability waiver for employers and others.

In this case, the document signed by plaintiff Sarmad Syed both authorized the company (M-I) to procure Syed’s consumer report and provided the firm and its agents with a broad release of liability for FCRA violations.

The three-judge panel also determined that a FCRA violation is “willful” if an employer’s background check disclosure document consists solely of the disclosure but is accompanied by prohibited elements, such as a liability waiver. In its decision, the court reaffirmed that the FCRA specifically (a) requires companies to tell applicants if they intend to obtain a consumer report and (b) allows them to refuse. The full text of the Opinion in SYED v. M-I, LLC, filed January 20, 2017, is available here.