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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The legal landscape surrounding background checks seems to be constantly changing. With the multitude of Fair Credit Reporting Act (FCRA) lawsuits filed recently, courts have had the opportunity to interpret many provisions of the FCRA.
Continuing this trend, the Ninth Circuit Court of Appeals dove into FCRA interpretation with Gilberg v. California Check Cashing Stores, LLC. The court looked at what may be one of the most debated and confusing obligations of the FCRA: the disclosure requirements for employers that use a background screening company to get background information on employees and applicants. You may remember that before obtaining background information from a background screening company on an applicant or employee, an employer must:
Provide the applicant/employee with a clear and conspicuous written disclosure, in a document consisting solely of the disclosure, that the employer may obtain a Consumer Report on the applicant/employee for employment purposes; and
Get the applicant/employee’s written consent to receive such report
In this case, after analyzing an employer’s disclosure document, the Ninth Circuit determined that it was NOT: (1) clear; and (2) in a document that consisted solely of the disclosure. To read the court’s decision, click here.
Some potential takeaways from the court’s analysis:
The court’s decision may give employers some food for thought on what can, and more importantly, what can’t be in their disclosure forms. Mainly, it may not be unreasonable to think that other courts could adopt the Ninth Circuit’s standards for FCRA compliance. Of course, it’s always a good idea to discuss your disclosures with trusted legal counsel to make sure that your documents fit in with current court interpretations of all applicable laws.
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We have previously written about Gilberg v. California Check Cashing Stores, LLC, a recent decision by the Ninth Circuit Court of Appeals that dove...
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The Fair Credit Report Act (FCRA) is central to the use of background checks for employment. For better or worse, the FCRA is often made clearer...
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The Ninth Circuit Court of Appeals has recently issued a few well-publicized decisions on Fair Credit Reporting Act (“FCRA”) disclosure and...