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Employer May Have Willfully Violated The FCRA By Failing To Provide Job Applicants With A Standalone Disclosure
The Fair Credit Reporting Act (FCRA) requires employers who seek to obtain a consumer report about a job applicant to disclose their intention of obtaining a consumer report and to obtain the applicant’s consent. The disclosure must be “clear and conspicuous” in a writing that solely contains the disclosure, and the consent has to be made in writing. The FCRA allows job applicants to sue employers for willful or reckless violations of the Act.
Vicki Hebert applied to work for Barnes & Noble. During the application process, Barnes & Noble’s consumer reporting agency, First Advantage, emailed Hebert a link that displayed Barnes and Noble’s consumer report disclosure and requested her authorization to procure a consumer report. Hebert clicked the link, viewed the disclosure, and authorized Barnes & Noble to procure her consumer report.
The disclosure included the following paragraph:
“Please note: Nothing contained herein should be construed as legal advice or guidance. Employers should consult their own counsel about their compliance responsibilities under the FCRA and applicable state law. First Advantage expressly disclaims any warranties or responsibility or damages associated with or arising out of information provided herein.”
In 2019, Hebert sued on behalf of a class of individuals that the company had procured or caused to procure a consumer report in the preceding five years. Hebert alleged that Barnes & Noble willfully violated the standalone disclosure requirement because it included the above extraneous information unrelated to the procurement of the disclosure.
Barnes & Noble filed a motion of summary judgement, alleging that the extraneous language was a result of a drafting error that occurred while Barnes & Noble was revising the disclosure to make sure it complied with the FCRA.
In their motion for summary judgement, Barnes & Noble submitted evidence that First Advantage sent its latest model disclosure form to a Barnes & Noble manager to reference as a template. The template included a footnote with the above extraneous language. The Barnes & Noble manager sent the template to outside counsel who said the template was generally fine. The footnote remained while in-house and outside counsel revised the language, as they thought the footnote would not be a part of the disclosure form displayed to job applicants. After the revised disclosure form was finalized, the Barnes & Noble manager sent the form to First Advantage, with the extraneous language included. The disclosure was uploaded to First Advantage’s website and was displayed to job applicants as a part of Barnes & Noble’s employment application process when it went live on its website.
The trial court entered judgement for Barnes & Noble. It reasoned that Hebert could not establish willfulness because the facts showed the extraneous language was nothing more than a mistake. Hebert appealed.
The Court of Appeal reversed the trial court. It reasoned that the issue of whether Barnes & Noble was willful in violating the FCRA was a question for the jury. The Court of Appeal also held that Hebert introduced evidence that at least one of Barnes & Noble’s employees was aware that the extraneous language would be included in the disclosure form when he sent it to First Advantage before it went live on its website. The Court of Appeal also reasoned that a jury could find recklessness because of Barnes & Noble’s continuous use of the allegedly problematic disclosure, which it used for nearly two years, suggests Barnes & Noble had no proactive monitoring system in place to ensure its disclosure was FCRA-compliant.
Hebert v. Barnes & Noble, Inc. (2022) 78 Cal.App.5th 791.
The FCRA imposes stringent requirements for employers who obtain consumer reports through consumer reporting agencies. Consumers who prevail in lawsuits against employers for violations of the FCRA can obtain actual damages, attorneys’ fees, and putative damages for any willful violations of the Act. This case shows the importance of working with a consumer agency and counsel to ensure compliance with the FCRA.