As we reported here, employers that perform background checks on job applicants or employees have been getting hit with class actions claiming they failed to follow the special notice and authorization requirements under federal and state law. Connor v. First Student, Inc., No. 2015 WL 4768123 (Cal. Ct. App. Aug. 12, 2015), is a recent bellwether case – on behalf of more than 1200 plaintiffs – where the employer was accused of failing to properly follow the notice procedures outlined in the Investigative Consumer Reporting Agencies Act (ICRAA) despite having properly followed the procedures outlined in the Consumer Credit Reporting Agencies Act (CCRAA). Generally speaking, the ICRAA governs background checks on consumer character information, whereas the CCRAA governs background checks on consumer creditworthiness (although it also includes character information in certain circumstances).
Connor worked as a school bus driver for First Student after her former employer, Laidlaw, was acquired. First Student hired HireRight to conduct background checks on Connor and all other former Laidlaw school bus drivers and aides. Connor alleged that the notice did not satisfy the specific requirements of the ICRAA, because First did not obtain her required written authorization before obtaining information relating to employees’ character, general reputation, educational background that may reflect on the potential for employment. The trial court granted summary judgment in favor of First Student, and Connor appealed.
First Student argued, relying on Ortiz v. Lyon Mgmt. Grp., Inc., 157 Cal. App. 4th 604 (2007), that the ICRAA was unconstitutionally vague because First Student was also required to and did follow the CCRAA, which did not require an authorization. The Court of Appeal disagreed. It found that both Acts applied and specifically rejected Ortiz, finding that the Ortiz court did not point to any language in either act that precludes application of both statutes to the same consumer report.
According to the Connor court, the mere fact that two acts overlap in their coverage does not make them unconstitutionally vague. The Court stated that “[r]edundancies across statutes are not unusual events in drafting, and so long as there is no ‘positive repugnancy’ between the two laws, a court must give effect to both.” Here, the court found no “positive repugnancy” between the ICRAA and the CCRAA, because compliance with the CCRAA for creditworthiness does not absolve a user of a consumer report that includes the consumer’s character information from liability if the user does not also comply with the obligations imposed by the ICRAA.
Although courts are divided, the takeaway for employers is this: if you want to get background check information for your employees, make sure you’ve spoken to counsel and considered whether you must meet the requirements of either or both ICRAA and the CCRAA. In circumstances where it is not clear which applies, the prudent course is to follow both.