Authorization and Disclosure Forms

FCRA Authorization and Disclosure forms should be reviewed regularly to check for industry best practice updates. It’s possible that the sample form you’re using or the forms your staff or legal counsel created even a year or two ago, may no longer be up to date. Let’s review the FCRA authorization and disclosure forms basics as well as some of the recent litigation that has provided us with best practice guidance regarding these forms.

What are authorization forms?

The FCRA tells us that before a background check can be ordered for employment purposes, the candidate must sign an authorization form. While the FCRA does not provide a lot of detail surrounding the requirements for this form, the FTC and case law have provided guidance. Is your authorization form up to date with these industry best practices?

A compliant FCRA authorization form should:

• Acknowledge that a pre-employment background check will be conducted.
• Be a stand-alone document.
  • While it is technically compliant for this form to be combined with a disclosure, it is best practice for it to be on a stand-alone document.
• Be signed by the job applicant, either in print or electronically.

FCRA-compliant background-check authorization forms should NOT:

• Include liability waivers or other releases related to the hiring process or background check
• Require the applicant to certify the accuracy of a job application
• Seek applicant acknowledgement that the company follows fair hiring practices, avoids discrimination, is an equal-opportunity employer, etc.

What are disclosure forms?

The FCRA indicates that a clear and conspicuous disclosure must be made in writing to the candidate prior to conducting a background check for both a consumer report as well as an investigative consumer report. Case law, Mitchell v. Winco Foods, LLC, tells us that these disclosures should be separate documents.

Do your disclosures comply with the current industry best practices listed below?

A compliant FCRA consumer report disclosure should:

• Inform the applicant of intent to run a background check on them.
• Clearly indicate that a background check will be used to inform a hiring decision.
• List that an agency is conducting the background check.  In California, the specific agency name must be listed.
• Be clear. It must be easy to understand, using simple, direct language.
• Be conspicuous. The disclosure cannot be buried in fine print or embedded in a job application. It must be “reasonably understandable”.
• Be in a standalone document. The candidate must have the opportunity to print the form for review and it must be on its own page.

A compliant investigative consumer report disclosure should:

• Inform the candidate that an investigative consumer report, including information as to their character, general reputation, personal characteristics, and mode of living, whichever are appliable, may be made.
• Be delivered to the candidate in writing no later than three days after the report was first requested
• Include a statement informing the candidate of their right to request additional disclosures regarding the nature and scope of investigation and a copy of the FCRA summary of rights.

A compliant FCRA disclosure should NOT:

• Include any extraneous information
  • While “extraneous information” is not clearly defined by the FCRA, the FCRA does indicate that this document should only consist of a disclosure that a background check is being conducted and that it is for employment purposes.
    • Case law, Walker v. Fred Meyer, Inc., further confirms that a disclosure may include what a consumer report entails, how it will be obtained, and the permissible purpose for which it may be used
• Include corporate or legal jargon
• Include a liability waiver
  • Syed v. M-I, LLC
• Include state and/or local laws
  • Gilberg v. California Check Cashing Stores

If you’re unsure if your authorization and disclosure forms are up to date with today’s best industry practice standards, you may want to have your legal counsel or internal staff review your documents to ensure compliance.

How can InCheck help?

Here at InCheck, compliance is a top priority, and we strive to keep clients
well-informed of the various requirements of federal, state, and local laws and regulations which must be followed. While we cannot provide legal advice, we are always happy to explain to our clients our understanding of various laws’ requirements for informational purposes. Additionally, we can provide our clients with sample documents (e.g., consumer report disclosure, authorization, pre-adverse action notice, adverse action notice) and white papers on various topics.

Please feel free to call (414- 727-1718) or email (intouch@inchecksolutions.com) us today for more information on how we can help you with your background screening process!