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Federal Law Updates | Oct 09, 2017

Ninth Circuit Court Nixes Background Check Liability Waivers

Ninth Circuit Court Nixes Background Check Liability Waivers

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”).

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.

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 (applies to Montana, California, Idaho, Washington, Oregon, Nevada, Arizona, Alaska and Hawaii) has ruled the waiver as a violation of the FCRA.

With the ruling by the Ninth Circuit Court, we suggest companies consider the removal of the waiver language even if you have business operations in states outside of the Ninth Circuit Court’s region. MyHRConcierge Disclosure and Authorization forms no longer include this liability waiver. If you are a current employee screening , you can download the updated Disclosure and Authorization form from the Client Portal.

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

The HR and business professionals at MyHRConcierge are here to respond to your questions and concerns, and keep small to medium-sized businesses compliant with federal and state labor laws. Delivering personal service to our Partners and Clients is the heart and soul of our business.