By Nicole D. Prysby, J.D.
The California Investigative Consumer Reporting Agencies Act (ICRAA) is not unconstitutionally vague as applied to employer background checks simply because it overlaps in part with the California Consumer Credit Reporting Agencies Act (CCRAA), held the California Supreme Court. A bus driver filed a class action against her employers, alleging that the notice provided to her before the background checks were conducted did not satisfy ICRAA’s specific requirements and that her employer failed to obtain her written authorization, as ICRAA requires. The employer argued that ICRAA is unconstitutionally vague as applied to the bus driver’s claim because it overlaps with CCRAA when applied to background checks performed by an employer. But the court rejected the employer’s argument, finding that potential employers can comply with both statutes without undermining the purpose of either. Only ICRAA governs reports obtained from personal interviews that bear solely on an individual’s character and only CCRAA governs credit information obtained directly from creditors for developing a consumer’s credit record. In the event that information revealed in an ICRAA background check contains a subject’s credit information and the two statutes thus overlap, a regulated party is expected to know and follow the requirements of both statutes, even if that requires the party to seek a subject’s written authorization to conduct a credit check because it appears possible that the information ultimately received may be covered by ICRAA. Any partial overlap between the statutes does not render one unconstitutionally vague and they can coexist because both acts are sufficiently clear (Connor v. First Student, Inc., et al., August 20, 2018, Chin, M.).
A bus driver filed a class action against her employers and the investigative consumer reporting agencies that conducted background checks on her. She alleged that the notice provided to her before the background checks were conducted did not satisfy ICRAA’s specific requirements and that her employer failed to obtain her written authorization to conduct the background check, as ICRAA requires. Before the trial court, the employer moved for summary judgment, arguing that ICRAA is unconstitutionally vague as applied to the bus driver’s claim because it overlaps with CCRAA and that, in any event, the notice satisfied CCRAA. The trial court agreed with the employer, but the court of appeals reversed, holding that although ICRAA and CCRAA might overlap to some degree, there is no “positive repugnancy” between them that would render ICRAA unconstitutional. The employer appealed.
Statutory background checks. In 1975, the California legislature enacted ICRAA and CCRAA to govern consumer background checks, including checks for employment purposes. Until 1998, consumer reports were classified under CCRAA or ICRAA, depending on the means used to collect the information in the reports. CCRAA excluded any report containing solely character information obtained through personal interview. Therefore, certain reports containing information gathered through personal interviews were subject to ICRAA only. But both statutes governed reports that contained information relating to character and creditworthiness, based on public information and personal interviews that were used for employment background purposes. In 1998, the legislature amended ICRAA to eliminate the personal interview limitation and expand the statute’s scope to include character information obtained under CCRAA or “obtained through any means.” After the amendment, CCRAA continues to govern consumer reports that include character information obtained from a source other than personal interviews, as long as those reports contain consumer credit information.
Alleged vagueness issues. The employer asserted that CCRAA and ICRAA were initially intended to be exclusive of each other and that the 1998 amendment was not intended to abolish that distinction. Therefore, the overlap created by the ICRAA amendment renders the statute unconstitutionally vague whenever CCRAA also might apply. The bus driver argued that the two statutes were never exclusive and the 1998 amendment did not change that fact. The California high court agreed with the bus driver and found that potential employers can comply with both statutes without undermining the purpose of either. If an employer seeks a consumer’s credit records exclusively, then the employer need only comply with CCRAA. An employer seeking other information that is obtained by any means must comply with ICRAA. In the event that any other information revealed in an ICRAA background check contains a subject’s credit information and the two statutes thus overlap, a regulated party is expected to know and follow the requirements of both statutes, even if that requires the party to seek a subject’s written authorization to conduct a credit check because appears possible that the information ultimately received may be covered by ICRAA.
The court rejected the employer’s argument that because ICRAA and CCRAA cover the same subject matter, it is unclear which statute applies in the context of employment background checks. The notice that the employer sent to the bus driver stated that the background check would include information about the driver’s character, thus placing it within the scope of ICRAA. The notice also specifically cited ICRAA, which indicates that the employer knew it needed to comply with ICRAA.
The court also rejected the employer’s argument that if the legislature intended ICRAA to apply to employment screening reports that previously were exclusively subject to CCRAA, it would have amended CCRAA to conform to this understanding. There was no need to amend CCRAA because its limiting language was not in conflict with ICRAA.
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