FCRA Disclosures Must Stand Alone, $2.3 Million Delta Airlines Settlement Shows

Author: Michael Cardman, XpertHR Legal Editor

January 11, 2019

The Fair Credit Reporting Act (FCRA) requires employers that use outside companies to conduct a background check and/or obtain a credit report to, among other things, convey to job applicants their intent to do so with a clear and conspicuous written disclosure.

This disclosure must be made "in a document that consists solely of the disclosure," with no extraneous information. Failure to keep the disclosure separate from other information can prove costly, as a recent settlement illustrates.

Delta Airlines has agreed to pay $2.3 million to settle claims from about 44,000 job applicants alleging the airline violated FCRA with disclosure forms that include impermissible extraneous information.

  • One form included acknowledgments that authorizing a background check would not also authorize the release of medical information or create any sort of employment contract, obligation or duty. Both were extraneous and the latter was misleading, according to the plaintiffs, because FCRA imposes duties on Delta once it obtained a consumer report. For example, if Delta were to decide after reviewing a consumer report not to hire an applicant, it would have an obligation to provide a copy of the report and notification of the right to dispute information in the report.
  • The plaintiffs also claimed one of the disclosure forms was not a stand-alone disclosure because it references the terms consumer report and investigative consumer report by referring to FCRA without defining the terms. "The job applicant[s] must read the statute if they wish to understand the disclosure," the settlement states.
  • Another form included extraneous information about state laws.

The Equal Employment Opportunity Commission and the Federal Trade Commission have published joint guidance about background checks to help other employers avoid FCRA violations. With regards to stand-alone disclosures, the guidance states, "The notice can't be in an employment application. You can include some minor additional information in the notice (like a brief description of the nature of consumer reports), but only if it doesn't confuse or detract from the notice."