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Online Background Check Disclosure Form Did Not Violate the FCRA

Published by on June 10, 2015

Companies utilizing online applications recently received a favorable ruling regarding the use of online background check disclosure forms. In Goldberg v. Uber Technologies, Inc., et al., the pro se plaintiff challenged the online background check disclosure form used by Raiser, LLC, a staffing company providing peer-to-peer driving services through the Uber mobile app, on the […]

Companies utilizing online applications recently received a favorable ruling regarding the use of online background check disclosure forms. In Goldberg v. Uber Technologies, Inc., et al., the pro se plaintiff challenged the online background check disclosure form used by Raiser, LLC, a staffing company providing peer-to-peer driving services through the Uber mobile app, on the grounds that Raiser’s form violated the Fair Credit Reporting Act’s “clear and conspicuous disclosure” requirement.

Raiser’s online application included a separate text box incorporated into the online application entitled “Background Check Terms.” Only the first three lines of the incorporated text box were visible. Applicants had to scroll through the box to read the entire disclosure and then electronically accept the disclosure terms.

In this case, the plaintiff argued that the background check was not clear and conspicuous because applicants had to scroll through the document to see all of the terms. The plaintiff further argued that the terms document did not consist solely of the disclosure, because of the document’s visible preamble generally stating Uber’s commitment to passenger safety.

The U.S. District Court for the District of Massachusetts was not swayed by the plaintiff’s arguments and granted Uber’s motion for judgment on the pleadings. The court based its decision partially on the fact that the document title was conspicuous, and the visible portion of the document “informed the reader of the full scope of the background checks that would be conducted…” Further, the court found that a brief preamble listing a general business goal did not undermine the nature of the document when the rest of the form discussed the full extent of the background check.

Laconic Lookout: Individual and class FCRA claims are becoming more common. Many of these claims are based on the Act’s related requirements that the disclosure be clear and conspicuous and be in a document consisting solely of the disclosure. While the above-referenced case is helpful to employers, most courts have not clearly defined what constitutes a “clear and conspicuous disclosure in a document consisting solely of the disclosure.”

Given the lack of an articulated standard, employers should err on the side of caution. Employers utilizing online applications should clearly separate the background check disclosure from the rest of the online application. Raiser’s decision to create a separate agreement to the background check disclosure was an excellent way to carve out the disclosure and separate it from the rest of the application.

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