• You must follow California law relating to obtaining conviction information if you intend to seek an investigative consumer report. In general, this information cannot be obtained before a conditional job offer. For more information, see Obtaining Background Checks and Investigation by Employers.

The investigative report must include the investigative consumer reporting agency’s Internet address. If the agency does not have an Internet address, the report must include the agency’s telephone number. These requirements allow the person to find information on the investigative reporting agency’s privacy practice, including if the person’s personal information will be sent outside the United States or its territories.2

If you intend to obtain an investigative consumer report, both California and federal law require that you:

• Provide a clear and conspicuous written disclosure to the applicant that a report may be obtained for employment purpose in a separate stand-alone document that consists solely of the disclosure.
• Get authorization to obtain the investigative consumer report. This authorization may be made on the disclosure document.3

• Disclosure and Authorization to Obtain Investigative Consumer Report

Make certain that your disclosure and authorization meet these legal requirements. Recent cases have strictly interpreted these requirements to prohibit employers from including anything extraneous in a disclosure:

• A 2017 Ninth Circuit court decision found a prospective employer willfully violated the FCRA when it included a liability waiver in its required FCRA background check disclosure form. This ruling emphasizes that no other information or provisions are to be included with the required FCRA disclosure, except for an authorization to conduct the check.4
• A 2019 Ninth Circuit decision clarified that FCRA's requirement that the disclosure document can consist only of the FRCA disclosure means that it can’t include any additional information, including disclosures required under state law.5 As a result, you must provide separate disclosure documents under FCRA and California law.

However, the U.S. Ninth Circuit Court of Appeals clarified that an employer doesn’t violate the FCRA by providing the disclosure document at the same time as other hiring-related materials, as long as the disclosure itself is “standalone.”6

Under California law, the disclosure must inform the person:

• That an investigative consumer report will be made about their character, general reputation, personal characteristics and mode of living;
• The report’s permissible purpose;
• The investigative consumer reporting agency’s name, address and telephone number; and
• The requested investigation’s nature and scope. 7

The disclosure must also state that, under section 1786.22 of the California Civil Code, the person can view, during normal business hours, the file maintained by the consumer reporting agency. They can also obtain a copy of this file upon submitting proper identification and paying the costs of duplication services, by mail or by appearing at the consumer reporting agency in person. They can also receive a summary of the file by telephone. The agency must have personnel available to explain the file. The agency must explain any coded information appearing in the file. If the individual appears in person, another person of their choice can come along, if this person furnishes proper identification.

As a best practice, you should provide the FCRA - Summary of Your Rights at the same time you make the disclosure of your intent to obtain a report.

You must obtain the person’s written authorization to obtain the report.8 The authorization must provide, by means of a check box, a way for the person to request a copy of any report that is prepared. If the person wants to receive a copy of the report, you must send the copy within three business days of receipt. To send a copy to the person, you can contract with any other entity, such as the consumer reporting agency. The notice to request the report can be contained on either the disclosure form or a separate consent form. The copy of the report furnished to the person must contain the name, address and telephone number of the party that issued the report, and how to contact that party.9

You are required to certify to the consumer reporting agency that you have made the applicable disclosures to the subject of the report. These disclosures include accepting the obligation to provide the person with a copy of the report in a timely manner if requested. You must also provide the person with the consumer reporting agency’s name and address, if adverse action is taken.10

• Certification to Investigative Consumer Reporting Agency

Before taking adverse action based on an investigative consumer report, provide the person with a copy of the Pre-Adverse Action Disclosure, and include a copy of the consumer report that you relied on. This gives the person an opportunity to explain any negative information. Also provide a copy of the FCRA notice, a Summary of Your Rights Under the Fair Credit Reporting Act.

• Pre-Adverse Action Disclosure
• Fair Credit Reporting Act - Summary of Your Rights

• Note that the FCRA - Summary of Your Rights was updated in 2018 to include a notice to consumers about their right to request a security freeze on their credit reports.

A common question is how long an employer should wait to allow the person to explain any negative information before making a final decision. The FCRA does not specifically address the length of time, but a reasonable amount of time should be allowed. In one Congressional analysis, a five business day period was recommended and that is a standard which is often used by employers.11

If you deny employment after obtaining an investigative consumer report, before taking the action, advise the person facing the adverse action. Use the Adverse Action Notice. Inform the applicant/employee:

• That the adverse action was because of information in the report;
• Of the name and address of the investigative consumer reporting agency making the report;
• That the company selling the report did not make the decision and cannot give specific reasons for it; and
• That they have a right to dispute the report and may obtain an additional free report within 60 days.12

• Adverse Action Notice

You can procure or order an investigative consumer report for the purposes of employment if you suspect wrongdoing or misconduct by the subject of the report. In this case, these rules do not apply.13

• Recently, a California Court of Appeal ruled that job applicants and employees can recover a statutory sum when an employer violates California’s background check rules without needing to show that the violation caused any harm, highlighting the importance of complying with all technical and procedural rules under the law.14

The FCRA prohibits consumer reporting agencies from providing consumer reports that contain medical information for employment purposes or in conjunction with credit or insurance transactions, without the specific prior consent of the subject of the report. In the case of medical information being sought for employment purposes, the individual must explicitly consent to the release of the information in addition to generally authorizing a consumer report.

Comply with all legal recordkeeping guidelines regarding retention of any background report information. When you dispose of background reports (and information gathered from them), the FCRA requires that you do so “securely,” which can include burning, pulverizing or shredding paper documents and permanently removing electronic information from your computer systems so that the information can’t be read or reconstructed.

• Limit the scope of consumer investigations to job-related information. Investigative reports that are not job-related may violate federal and state civil rights laws if they have a disparate impact on minority job applicants. Treat all job applicants and employees equally without regard to race, national origin, sex, religion, age or any other protected characteristic.

1. Civ. Code sec. 1786.50