California has two laws that protect employees from unauthorized background checks: the Consumer Credit Reporting Agencies Act, Civil Code section 1785, et seq. (“CCRAA”) and the Investigative Consumer Reporting Agencies Act, Civil Code section 1786, et seq. (“ICRAA”). (This blog post addresses only ICRAA, but we will post about CCRAA soon.) The California Supreme Court recently upheld the constitutionality of these statutes in a case called Connor v. First Student, Inc., S229428 (August 20, 2018). So now what?
ICRAA defines the term “investigative consumer report” as a report in which “information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through any means.” See Civ. Code § 1786.2(c). Section 1786.2(b) defines the term “consumer” as including a “natural individual who has made application to a person for employment purposes.” Section 1786.2(f) provides that the term “for employment purposes” means “for the purpose of evaluating a consumer for employment, promotion, reassignment, or retention as an employee.” See Civ. Code § 1786.2(f).
Accordingly, when companies run background checks for the purpose of evaluating whether to hire or retain workers, they must comply with ICRAA. ICRAA requires that an employer take two steps before running an investigative consumer report on an employee. First, it must provide a clear and conspicuous disclosure to the employee “in a document that consists solely of the disclosure.” See Civ. Code § 1786.16(a)(2)(B). Second, it must get written authorization from the employee. See Civ. Code § 1786.16(a)(2)(C). A company that does not do both of these things violates ICRAA.
Civil Code section 1786.50 provides that any employer or agency that runs an unlawful background check is liable to the person who is the subject of the background report for actual damages or, except in the case of class actions, ten thousand dollars ($10,000), whichever is greater. It also provides for attorney’s fees and costs, and, if the violation was grossly negligent or willful, punitive damages.
The attorneys at Hunter Pyle Law handled the Connor case and prevailed before the California Supreme Court in a unanimous decision. If you have questions about a California background check, please feel free to contact us for a confidential and free initial intake. We can be reached at (510) 444-4400 or at inquire@hunterpylelaw.com.