Background Check on a California Resident

California employers should recognize that the terms "consumer report" and "investigative consumer report" have different meanings under the federal Fair Credit Reporting Act, 15 U.S.C. §1681 et seq., ("FCRA") and the California Investigative Consumer Credit Reporting Agencies Act (ICRAA), Cal. Civ. Code §1786 et seq.

The ICRAA definition of an "investigative consumer report" is much broader than that of the FCRA. The ICRAA defines an investigative consumer report as a consumer report in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through any means. Under the FCRA, an investigative consumer report is a subset of a consumer report, wherein this type of information is obtained through personal interviews.

The ICRAA disclosure/authorization requirements for preparing an investigative consumer report for employment purposes include (also refer to §1786.16):

• The person procuring or causing the report to be made has a permissible purpose.
• The person procuring or causing the report to be made provides a clear and conspicuous disclosure in writing to the consumer at any time before the report is procured or caused to be made in a document that consists solely of the disclosure, that:
  • An investigative consumer report may be obtained.
  • The permissible purpose of the report is identified.
  • The disclosure may include information on the consumer's character, general reputation, personal characteristics, and mode of living.
  • Identifies the name, address, and telephone number of the investigative consumer reporting agency conducting the investigation.
  • Notifies the consumer in writing of the nature and scope of the investigation requested, including a summary of the provisions of Section 1786.22.
• The consumer has authorized in writing the procurement of the report.

A sample disclosure/authorization form specifically for California residents should be used in addition to the federal FCRA disclosure/authorization forms.

Further, also note that the FCRA is stricter with respect to notice and providing report copies in situations where adverse action will be taken based in whole or in part upon information contained in a consumer or investigative consumer report. An employer is required to follow the pre-adverse action and adverse action notification procedures as dictated by the FCRA.

Also note that the ICRAA provides an exemption of the above disclosure/authorization requirements if the report is sought for employment purposes due to suspicion held by an employer of wrongdoing or misconduct by the subject of the investigation. However, please be careful with this provision.

This information is intended for informational purposes only and is not to be considered legal advice. Please realize that no publication can anticipate all individual situations and questions that may arise. If you have questions concerning your legal rights and obligations under state or federal consumer reporting laws, or any local laws or regulations governing the acquisition and use of applicant and employee information, please consult with your experienced employment law counsel.