The Fair Credit Reporting Act requires employers to obtain written permission before conducting a background check and requires certain disclosures if a consumer is denied employment or a promotion based on the background check. Our attorneys have successfully litigated cases, when employers and consumer reporting agencies failed to comply with the disclosure, adverse actions, and investigation requirements of the Fair Credit Reporting Act.

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Employment background checks are common practice for businesses in almost every industry. Even if a security clearance is not required for your employment, many businesses still obtain background checks as a precondition to employment. Often, employers obtain background checks without a consumer’s knowledge and without providing the consumer with a copy when the employer makes any unfavorable determination based on the contents of the report, such as denial of an employment opportunity or promotion.

The Fair Credit Reporting Act is not only limited to ensuring the accuracy of credit reports, but it also protects consumers when employers obtain background checks, which are consumer reports, to make employment decisions. In particular, the Fair Credit Reporting Act requires employers to obtain the consumer’s written permission before conducting a background check. The Fair Credit Reporting Act also requires employers to provide the consumer with a disclosure that the employer may use the information from the background check to make decisions regarding the consumer’s employment. To the extent the employer takes an adverse action (i.e. an unfavorable decision) against the consumer based on the background check, the Fair Credit Reporting Act also requires the employer to provide the consumer with a notice of the adverse decision and a copy of the report obtained by the employer. The common forms of adverse actions are rejection of employment, denial of a job promotion, and reassignment of employment such as receiving a lower level of employment because of the information in the report.

The entities that furnish consumer reports to employers must also comply with Fair Credit Reporting Act, which requires these entities to conduct a reasonable investigation if a consumer disputes the accuracy or completeness of the information contained in their consumer report provided to the employer. Our attorneys have successfully litigated cases, both individually and on a class action basis, when employers and consumer reporting agencies failed to comply with the disclosure, adverse action, and investigation requirements of the Fair Credit Reporting Act.