Federal Trade Commission Issues Final Rule on Noncompetes
On April 23, 2024, by a 3 to 2 vote, the Federal Trade Commission (FTC) issued a final rule to “promote competition by banning noncompetes...
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We’ve talked about how, in California, the Investigative Consumer Reporting Agencies Act (“ICRAA”) and the Consumer Credit Reporting Agencies Act (“CCRA”) require employers to make specific disclosures to their applicants and employees before obtaining background reports on them, beyond the disclosures required by the federal Fair Credit Reporting Act (“FCRA”). The patchwork of California-specific required disclosures to applicants and employees surrounding background reports doesn’t stop at the state level.
San Francisco, California, has its own law, the Fair Chance Ordinance (“FCO”), that requires specific disclosures be made to applicants and employees before an employer covered by the law can obtain background reports on them that contain conviction history, as defined by the law.
Employers covered by the law (“Employers”) are those located or doing business in San Francisco, and that employ five or more persons regardless of location, including their owner or owners and management and supervisorial employees. Employers do not include California or federal government employers. With certain exceptions, conviction history is information from any jurisdiction that a person has been convicted of a felony or misdemeanor for which the person has been imprisoned, fined, placed on probation or paroled. Conviction history is also information from any jurisdiction regarding an arrest undergoing an active pending criminal investigation or trial that has not yet resolved.
Before obtaining background reports on their applicants and employees containing conviction history, the FCO requires employers to provide them with a specific disclosure provided by the San Francisco Office of Labor Standards Enforcement (“OLSE”), available here. The San Francisco disclosure consists of a notice developed by OLSE that informs applicants and employees of their rights under the FCO. Employers must provide the notice in English, Spanish, Chinese, Filipino, and any language spoken by more than 5% of the employer’s employees.
Employers are also required to post the San Francisco disclosure in a conspicuous place at every workplace, job site, or other location in San Francisco under the employer’s control frequently visited by their employees and applicants.
In addition to the San Francisco-specific disclosure, the FCO also details specific responsibilities for employers. To read the full text of the FCO, click here. For more information on the FCO, the OLSE provides helpful insight into the requirements for employers, available here.
Because of the complexity of laws surrounding background reports, especially on applicants and employees of San Francisco employers, it may be a good idea to speak with your legal advisor to ensure that you are in compliance with the FCO and other applicable laws.
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Last month we discussed California’s Investigative Consumer Reporting Agencies Act (“ICRAA”) and the state-specific disclosures required by the ICRAA...
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You’re probably aware of the federal Fair Credit Reporting Act (“FCRA”) disclosure and authorization requirements for employers that want to obtain...
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