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Can Employers Make You Waive Rights When Doing a Background Check?

When going for an interview most employers want to conduct a background check.  Employers want to delve into you personal and financial history to ensure that if you ace your interview there is nothing lurking in your credit that may raise a red flag.  In order to conduct a background check, employers must receive your express consent and according to a recent decision in the Ninth Circuit court of appeals there is no way around it.

The Background Check Procedure

Under the Fair Credit Reporting Act (“FCRA”) when an employer wants to conduct a background check there is a procedure that must be followed.  First, an employer must notify you that it intends to pull your report and this notice must be clear and concise.  In fact, the statutes specifically states the notice must be in a document that consists only of the disclosure.  Second, you must give written consent.  Third, if the employer plans to use the information contained in your report to make a decision whether or not to hire you, it must provide you notice and give you an opportunity to review your report and dispute any inaccurate information contained in the report.  Lastly, if the employer makes a decision not to hire you, it must provide you with a copy of your rights under the FCRA and an adverse action letter informing you about why it made its decision.

Syed v. M-1 LLC: A Historic Case

In Syed v. M-1 LLC, the 9th Circuit Court of Appeals was asked to consider whether the defendant employer violated the FCRA when it included a liability waiver in the same document as the request to access the plaintiff applicant’s credit.  In this case, Syed was provided with a document titled “Pre-employment Disclosure Release”.  The release was a request to obtain a background check on the plaintiff but also stated that by signing the release, Syed was waiving his rights to file suit against the employer for any violations of the FCRA.

Syed v. M-1 LLC: Trial Verdict

In response to the liability waiver, Syed filed a class action suit against M-1 LLC claiming his rights had been violated by including a liability waiver in the same document as the request to conduct a background check.  The Court of Appeals agreed with the plaintiff in holding that it is a violation of the FCRA to obtain an applicant’s credit report after including a liability waiver in the same document as the request to conduct a background check.

What This Case Means

The good news for consumers nationwide is that this case is a benchmark for how employers can treat job applicants during the interview process.  Employers are no longer able to take advantage of applicants and force them to agree to an employer accessing their credit while simultaneously forcing them to waive their right to file suit.  The FCRA was put in place to protect consumers and there should no be a way around following the letter of the law.  

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If you believe your rights have been violated by an employer under the FCRA contact SmithMarco P.C. for a completely free case review.

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