Ninth Circuit Court Nixes Background Check Liability Waivers

Last Updated on October 9, 2020 by G. T. HR

Make Sure Your Hiring Process is Compliant with the FCRA

Many companies inquire into a person’s background during the hiring process. These inquiries often include criminal history, credit checks, motor vehicle reports, employment history or other similar checks. If the company uses an outside party to perform these inquiries, it is deemed to be a consumer report and falls under the purview of the Fair Credit Reporting Act (FCRA).

How the FCRA Affects Employers

One component of the FCRA is that employers must obtain a signed Disclosure and Authorization Form from the applicant prior to obtaining a consumer report. This alerts the applicant that the company is going to obtain their consumer report as part of the employment process.

Liability Waiver Use and Scrutiny

Many Disclosure and Authorization forms includes a liability waiver. The liability waiver is used to discharge the employer and outside third party from any liability or claims relating to the reliance on the information disclosed using the Disclosure and Authorization.

This waiver has come under much scrutiny, and the Ninth Circuit Court has ruled the waiver as a violation of the FCRA. The Ninth Circuit Court applies to:

  • Montana
  • California
  • Idaho
  • Washington
  • Oregon
  • Nevada
  • Arizona
  • Alaska
  • Hawaii

FCRA Compliant Background Checks

With the ruling by the Ninth Circuit Court, we suggest companies consider removing the waiver language. We recommend this even if you have business operations in states outside of the Ninth Circuit Court’s region.

Get Legally Compliant Employee Screenings and Background Checks

MyHRConcierge Disclosure and Authorization forms no longer include this liability waiver. We offer legally compliant employee screening and background check services.

If you are one of our current employee screening clients, you can download an updated Disclosure and Authorization form from the Client Portal.

If you have any questions, contact MyHRConcierge at (855) 538-6947.