A recent class-action case involving an allegation that an employer's web-based application process violated the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681, et seq. was recently decided in favor of the employer. The plaintiff's attorneys alleged that the on-line application process contained "extraneous information" and therefore violated the section of the FCRA which requires that the disclosure be a stand-alone document. Apparently, the employer's electronic tool to schedule fingerprinting was presented side-by-side with the disclosure.
The employer's application process included two separate background checks to determine different kinds of information. During the first, "Applicant Screening Investigation," applicants are referred to a linked, online form "Request to Initiate Authorization for Investigation." Applicants are required to check a box indicating that "YES, I consent to this investigation and authorize [the employer] to procure a report on my background according to the terms below." When the box is checked, the form shows a date/time stamp and the applicant proceeds to enter information about prior addresses and employment history.
The language of the Request to Initiate Authorization for Investigation is as follows:
"In connection with my employment or application for employment with [employer], I authorize [employer] to request and obtain a consumer report that may contain information about my prior employment...prepared by [consumer reporting agency,] a consumer reporting agency. I understand that [consumer reporting agency] may utilize and report information from my former employers. I request, authorize, and consent to the release and disclosure of any and all such information to [employer] by [consumer reporting agency]."
When the applicant passes the initial background investigation and is offered and accepts employment, they are then directed to a web-based platform to create an account and enter basic personal information. This stage is deemed the Criminal Background Check and two forms are requested for completion during this stage. The first, "Consent Form Standard Package" is a five page document providing the applicant with an overview of the employer's employment policies. The applicant must electronically sign the document to continue. Once signed, a time-date stamp is generated and the applicant is presented with a second form, "Electronic Authorization Form for Consumer Reports." This one-page document discloses to the applicant that a consumer report may be obtained for a criminal background check and authorizes that consumer report. Again, the form is electronically signed, and time-date stamped.
The language of the "Electronic Authorization for Consumer Report" is as follows:
In connection with your application for employment...understand that consumer reports...may be requested or made on you including consumer credit, criminal records, driving record, education, prior employer verification, workers compensation and others....By electronically signing below...you hereby authorize and request, without reservation, any present or former employer, school, police department, financial institution, division of motor vehicles, consumer reporting agencies, or other persons or agencies having knowledge about you to furnish [consumer reporting agency] in any and all background information in their possession regarding you, in order that your employment qualifications may be evaluated."
The court ruled that the employer did not violate the FCRA because both forms were considered "clear and conspicuous" as mandated by the FCRA. The disclosure was written in language a lay person could understand clearly stated that a consumer report may be obtained for employment purposes. Finally, the court noted that the amount of text was minimal, with headings in boldface, capital fonts, using larger typeface than the fingerprint schedule tool that was beside it. The fingerprint scheduling tool was not considered distracting and the court dismissed the plaintiffs' case.
The court endorsed an application process where the disclosure is on a stand-alone screen in the context of an employer's website where other links on the page were not distracting. This is a big win for employers who have faced class-actions across the country challenging their application processes.
Best practices for the presentation of online disclosures:
- The disclosure should be on a screen by itself, separate from other pages of information.
- The disclosure and authorization should be clear - in a language that a lay person can understand so that they do not cause confusion or uncertainty for the applicant.
- The amount of text should be minimal.
- When the disclosure is on a screen with extraneous information (links to other parts of the application process, a footer of general information links, or a header of general site navigation), the documents should have headings in boldface and capital font and should use a larger typeface than the surrounding text.
- Each online document should show a date/time stamp when it is signed by the applicant. This enhances an employer's argument that each document is a stand-alone document