Recent events this year may entirely shift how employers in California evaluate background screening documentation and candidate transparency moving forward. A ruling on February 4, 2026, from the California Court of Appeals determined that plaintiffs have the right to actively pursue claims under California’s Investigative Consumer Reporting Agencies Act (ICRAA) based on alleged statutory violations, without the need to demonstrate and prove actual harm beforehand.
In Parsonage v. Wal‑Mart Associates, Inc, the California Court of Appeals, the Fourth Appellate District, issued a decision challenging the notion that filing a claim for violating ICRAA regulations specifically necessitates resulting in harm to a candidate. To put it in context, below is a timeline of the main events and turning points throughout the case.
Parsonage applied for employment with Wal-Mart, electronically viewed and acknowledged a background report disclosure, and electronically signed a background report authorization form permitting Wal-Mart to order an investigative consumer report. The forms allegedly listed multiple consumer reporting agencies that may be conducting the background investigation.
Regulations under the ICCRA require disclosure of the specific agency conducting the background check, its name, address, and contact telephone number. However, the disclosure listed six investigative consumer reporting agencies that may conduct the background check, rather than identifying the specific agency that conducted it. This was a leading factor in Parsonage ultimately filing a suit alleging multiple ICRAA violations.
Wal-Mart moved for summary judgment on the ground that the plaintiff lacked standing because she did not suffer any harm during the onboarding process, was hired, received her background report, and experienced no adverse employment action.
The Superior Court granted Wal-Mart’s motion for summary judgment, ruling that the applicant did not have grounds to pursue damages because she had suffered no harm and therefore a technical violation had no bearing. The case was thrown out before a trial was held.
On February 4, 2026, the California Court of Appeals chose to reverse the lower court’s decision. The court held that proof of harm is not required to bring a case under ICRAA, and that violations can still be penalized even if no harm occurred. The ruling favored the candidate.
This decision did not automatically grant the plaintiff damages; rather, it overruled the Superior Court's prior decision to dismiss the case. This allowed Parsonage to proceed with a proper trial for the alleged violations.
While the absence of clearly disclosing the specific consumer reporting agency conducting the background check was a primary driving factor for acting, the plaintiff alleged that Wal-Mart’s background check process violated ICRAA in three key areas:
The plaintiff sought $10,000 per ICRAA violation (or proven financial losses, whichever is greater), reimbursement of legal fees and court costs, and other potential additional damages.
To learn more about background check disclosure requirements for California employers, you can find the California statute at issue in the case here.
While the California Court of Appeals allowed the plaintiff's damages claim to move forward, it did not determine whether damages should be awarded. That issue will be decided in a future trial. What we do know, as of right now, is that a lack of adverse action does not automatically protect employers from ICCRA violation consequences.
Even though this ruling specifically interprets California law, it brings up an important question: How much risk does an employer assume when it treats background check disclosure requirements as a technical requirement, rather than a legal obligation?
Employers should consult their legal counsel before taking any action related to background check processes, disclosures, or compliance obligations.
This content is for informational purposes only and shall not constitute legal opinion or advice. Consult your legal counsel to ensure compliance.