In a Rare Employer Win – California Court Sides against Applicant in FCRA Dispute


While employers generally get nervous (and with good reason) regarding FCRA class action lawsuits, there is now a decision, and out of California, no less, in their favor.  In Culberson v. Walt Disney Parks and Resorts, the California Court of Appeals affirmed summary judgment for the employer in a class action lawsuit alleging willful violations of both the standalone and adverse action provisions of the FCRA.  Disney, the employer, had a standalone disclosure form that included a description of the report’s scope, a statement that Disney may share the information with affiliated companies, an explanation of the applicant’s rights, an explanation that a third party would produce the report, and the third party’s contact information.  The court held that the FCRA does not make clear what information may be included and at the time the disclosures were at issue (2011 and 2013), there was no guidance as to what to include or not, as there is today.  As such, the court found that Disney’s interpretation was reasonable.
With regard to the adverse action violation claim, Disney’s pre-adverse action notice stated, in part: “Based on [the reported] information, subject to you successfully challenging this information, we have decided to revoke your conditional offer of employment.” (emphasis added) The plaintiffs argued that this language constituted a final decision, and thus, an adverse action.  The court rejected this argument because of the “subject to” language contained therein, again finding that Disney’s interpretation was reasonable.
The court went further stating that even if there had been a violation, a trier of fact could not conclude that it was a “willful” violation.  The court’s emphasis on the lack of “willfulness” needed to pursue the claim distinguishes this case from other recent pro-employee decisions.
In light of this decision, employers should review their FCRA practices to ensure that they are reasonably interpreting its provisions in maintaining compliance.  Employers are encouraged to keep apprised of caselaw surrounding the FCRA and review their documents to ensure they meet these and other FCRA requirements.
As a reminder, at Hire Image, we provide our template forms using separate “standalone” forms, with simple, easy-to-follow language.  Our state law notices are always on separate documents and clearly labeled as such.  When using our online system, applicants are asked where they live and where they will be working and only receive the state notices applicable to them.
Please contact our office if you have any questions about our disclosure forms.  If you are interested in receiving a free review of your forms, please click here for more information.

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