The FCRA Standalone Disclosure Requirement, as the Ninth Circuit Has Read It

The Sentence the Litigation Turns On

Employment background check litigation in the Ninth Circuit has concentrated on one clause of 15 U.S.C. § 1681b(b)(2)(A). The provision bars a person from procuring a consumer report for employment purposes unless two things have happened first.

(i) a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; and (ii) the consumer has authorized in writing (which authorization may be made on the document referred to in clause (i)) the procurement of the report by that person.

15 U.S.C. § 1681b(b)(2)(A)

Courts have given the two halves of clause (i) separate names — the standalone document requirement and the clear and conspicuous requirement — and have treated them as independent tests that a single form can pass and fail in different combinations. Clause (ii) supplies the statute's one express exception: the authorization may share the page.

Syed and the Meaning of Solely

The line of cases begins with Syed v. M-I, LLC, 853 F.3d 492, decided January 20, 2017 and amended that March. M-I gave applicants a form headed "Pre-employment Disclosure Release" that contained the disclosure, the authorization, and a stipulation that signing released M-I from liability. The panel held that including the waiver violated § 1681b(b)(2)(A), reasoning from the plain text that the document must consist "solely" of the disclosure and that a statute expressing congressional intent "in reasonably plain terms" leaves that language conclusive.

The second holding is the one that set the stakes. The panel held the violation was willful, because the statutory language was unambiguous and the employer had added terms to the document anyway. The opinion notes the consequence: a negligent violation yields actual damages under 15 U.S.C. § 1681o, while a willful violation opens statutory damages ranging from $100 to $1,000 per consumer, punitive damages, and attorney's fees and costs under 15 U.S.C. § 1681n. A form defect replicated across an applicant class is what turns that arithmetic into class exposure.

Gilberg: State Notices Are Surplusage Too

Gilberg v. California Check Cashing Stores, LLC, 913 F.3d 1169, filed January 29, 2019, tested whether Syed reached surplusage that was itself protective. CheckSmart's one-page form, printed in what the panel described as Arial Narrow size 8, carried the federal disclosure followed by blocks headed for New York and Maine applicants, New York applicants, Oregon applicants, Washington State applicants, California applicants, and Minnesota and Oklahoma applicants.

CheckSmart argued that state-mandated disclosure language furthers the FCRA's purpose rather than undermining it, distinguishing Syed's liability waiver. The panel disagreed, holding that Syed's analysis "were not limited to liability waivers" and addressed surplusage generally, and that purpose does not override plain meaning. It added that the extra material failed on its own terms: the form referenced rights under state laws inapplicable to Gilberg and to extraneous documents that are not part of the mandated disclosure, and "[b]ecause the presence of this extraneous information is as likely to confuse as it is to inform, it does not further FCRA's purpose." The panel treated the district court decision in Noori v. Vivint, which had allowed information "closely related" to the disclosure, as foreclosed by Syed.

What Counts as the Document

Gilberg also resolved the mirror-image question, and resolved it against the plaintiff. Gilberg argued that the relevant document was every form she completed during the application process — four pages in total — relying on the California contract principle that several contracts made as parts of one transaction are taken together. The panel declined to import that principle into the FCRA, observing that under the proposed reading "it is difficult to see how an employer could ever provide an applicant written application materials without violating FCRA's standalone document requirement." The three-page employment packet was distinct from the one-page disclosure, and the disclosure form alone was the unit of analysis.

Walker and the Concise Explanation

Walker v. Fred Meyer, Inc., 953 F.3d 1082, filed March 20, 2020, took up as a matter of first impression what qualifies as part of the "disclosure" in the first place. The panel held that beyond a plain statement that a consumer report may be obtained for employment purposes, "some concise explanation of what that phrase means may be included," and cited the Federal Trade Commission's 1998 advisory opinion to Coffey, which had said that Congress intended the disclosure "not be encumbered with extraneous information" while allowing "a brief description of the nature of the consumer reports covered by the disclosure."

The panel then worked through Fred Meyer's five paragraphs one at a time, which is what makes the opinion a usable map rather than a restatement of Gilberg:

• Paragraph one, describing which employment purposes the reports may serve and that the reports concern character, general reputation, personal characteristics and mode of living, was part of the disclosure — the language tracks the FCRA's own definition of a consumer report
• The reference to investigative consumer reports survived as well, because § 1681a(e) makes an investigative consumer report a subcategory of consumer report rather than a separate thing
• Paragraphs two and three, naming the consumer reporting agency with its address, telephone number and website and describing what it would examine, "elucidate what it means to obtain" a report and were also permitted
• Paragraphs four and five, telling the applicant he could inspect the agency's files and obtain disclosure of the scope of any interview-based investigation, violated the standalone requirement — the panel accepted they were included in good faith but held they may pull attention toward rights that are not the subject of the mandated disclosure

Luna: Physical, Not Temporal

Luna v. Hansen and Adkins Auto Transport, Inc., 956 F.3d 1151, filed April 24, 2020, closed off the remaining theory. Luna argued that presenting a compliant standalone disclosure at the same moment as the rest of a commercial driver application defeated the requirement. The panel rejected the attempt to "bootstrap FCRA's physical requirement into a temporal one," holding that no authority suggests a disclosure must be distinct in time as well as in document.

Luna also settled the asymmetry between the two clauses. The authorization subsection, § 1681b(b)(2)(A)(ii), requires only that the consumer authorize "in writing." It carries neither the standalone requirement nor the clear and conspicuous requirement, and the panel declined the "wholesale importation" of clause (i)'s standards into clause (ii). Hansen and Adkins had placed its authorization at the end of a multi-page application alongside unrelated notices and waivers, and that placement did not violate the statute.

Clear and Conspicuous Is a Separate Test

Gilberg supplies the definitions the circuit now uses, drawn from its Truth in Lending decision in Rubio v. Capital One Bank: clear means "reasonably understandable," conspicuous means "readily noticeable to the consumer." The panel analyzed each prong separately and split them. CheckSmart's form was conspicuous — headings were capitalized, bolded and underlined, all relevant information appeared on the front of the page, and the small, cramped font was legible even if the panel thought it inadvisably so.

It was not clear, for two stated reasons. One sentence read: "The scope of this notice and authorization is all-encompassing; however, allowing CheckSmart Financial, LLC to obtain from any outside organization all manner of consumer reports and investigative consumer reports now and, if you are hired, throughout the course of your employment to the extent permitted by law." The panel observed that the second half lacks a subject, is incomplete, and gestures at limits it never identifies. Separately, the state-specific blocks could lead a reasonable reader to think only New York and Maine applicants may contact the consumer reporting agency for a copy of the report — an understanding the panel noted would be contrary to both the FCRA and California law.

What Remains Unsettled

Walker reversed the dismissal on the standalone claim but left the clear and conspicuous question for the district court in the first instance, so the circuit has not passed on whether Fred Meyer's surviving paragraphs are reasonably understandable. Gilberg assumed, without deciding, that clarity and conspicuousness present questions of law rather than fact, noting that neither party had argued the FCRA should be treated differently from the Truth in Lending cases it borrowed from. And the boundary Walker drew between a permitted "concise explanation" and impermissible surplusage is stated at the level of five specific paragraphs rather than as a general test, which leaves the classification of language falling between those examples open.

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