FCRA Doesn’t Impose Time Rule For Disclosure

April 28, 2020by accurateinvest
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“A truck driver’s “novel” argument that the Fair Credit Reporting Act was violated when his employer gave him a disclosure form at the same time as other employment documents doesn’t hold water, the Ninth Circuit ruled Friday, closing the book on a class suit against a vehicle transportation business.

In a published ruling, a three-judge panel upheld a June 2018 order by U.S. District Judge David O. Carter awarding summary judgment to Hansen & Adkins Auto Transport over claims brought by named plaintiff Leonard Luna alleging violation of the Fair Credit Reporting Act as part of its hiring process.

While the panel said that Luna is just one of many plaintiffs who have challenged elements of the federal consumer credit report law, his legal theory “is more novel than most.”

In particular, they pointed to Luna’s argument that Hansen flouted the FCRA by providing him and others with disclosure forms, which were written on separate pieces of paper, at the same time it provided a package of other employment documents. As such, Luna argued that the disclosure forms didn’t qualify as the sort of standalone disclosure notice that the law requires.

The Ninth Circuit said that Luna tried to “bootstrap” the law’s “physical requirement” that a disclosure form be separate from any other documentation “into a temporal one,” adding that there is nothing in Ninth Circuit precedent that prevents businesses from giving applicants a standalone FCRA disclosure “contemporaneously with other employment documents.”

“This argument stretches the statute’s requirements beyond the limits of law and common sense,” the panel said of Luna’s legal theory. “It is true that FCRA requires ‘that a disclosure form contain nothing more than the disclosure itself,’ but no authority suggests that a disclosure must be distinct in time, as well.”

The Ninth Circuit said that if it had accepted Luna’s view that FCRA disclosures can’t be presented with other employment documents, it would make it “difficult to see how an employer could ever provide an applicant written application materials without violating FCRA’s standalone document requirement.”

“Hansen & Adkins’s disclosure may have been provided alongside other application materials, but it appeared in a standalone document — precisely what FCRA requires,” the panel said.

Luna, a former truck driver for Hansen & Adkins, filed a putative class action in June 2017 taking aim at hiring processes that he believed flouted the FCRA. His suit noted that the company makes applicants fill out a so-called commercial driver employment application that allows the company to obtain information about applicants’ safety history and driving records as well as conduct background checks.

More specifically, job applicants had to sign a pair of documents related to consumer reports, according to facts of the case outlined in the Ninth Circuit’s ruling. One of those forms was a one-page disclosure notice that gave applicants a heads up that Hansen could obtain any reports pertaining to their employment history, prior drug and alcohol tests, and their driving record, according to the appellate ruling.

The other form was an “authorization” that if signed gave Hansen permission to run a background check, according to the Ninth Circuit’s ruling, which noted that the authorization was tacked on to the end of the company’s employment application, which included various other “notices, waivers, and agreements unrelated to acquiring the consumer report.”

Besides rejecting Luna’s argument regarding FCRA disclosure, the panel in Friday’s ruling also turned aside Luna’s contention that Hansen flouted the statute’s requirements for how employers obtain authorization to conduct background checks. The appellate court said that Luna wrongly attempted to carry over the FCRA’s disclosure requirements to the law’s mandates for authorization.

“This attempted wholesale importation of FCRA’s disclosure requirements runs aground on the statutory language, which provides only that a prospective employer must obtain the authorization ‘in writing,’” the panel said. “Crucially, the authorization subsection of FCRA lacks the disclosure subsection’s standalone document requirement. As FCRA dictates only that a consumer authorization be ‘in writing,’ without specifying its format, Hansen & Adkins’s authorization conformed to the requirements of the statute.”

Plaintiffs’ counsel Aashish Desai told Law360 “we respectfully disagree with the panel ruling.” Counsel for the employer declined to comment.

Ninth Circuit Judges Jerome Farris and M. Margaret McKeown, and Second Circuit Judge Barrington Parker, who sat by designation, were on the panel for the Ninth Circuit.

The plaintiffs are represented by Aashish Y. Desai and Adrianne DeCastro of Desai Law Firm.

Hansen & Adkins is represented by Victor J. Cosentino of Larson & Gaston LLP.

The case is Luna v. Hansen & Adkins Auto Transport, case number 18-55804, in the U.S. Court of Appeals for the Ninth Circuit.”

Law360 (April 24, 2020, 10:19 PM EDT)

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