Disclosure to the Applicant

We’d like to take a moment to reiterate something you shouldn’t do when screening applicants. Don’t encumber your disclosure document with extraneous information. The Federal Trade Commission (FTC) has written in their guidance for employers:

Tell the applicant or employee that you might use information in their consumer report for decisions related to their employment. This notice must be in writing and in a stand-alone format. The notice cannot be in an employment application. You can include some minor additional information in the notice, like a brief description of the nature of consumer reports, but only if it does not confuse or detract from the notice.

This sounds simple enough. And yet it is in the top three of areas in which employers are sued in the employment screening process. And these are big employers, some with stables of attorneys. The suits are typically class action suits—you’ve used the same disclosure repeatedly and you have a class of individuals in the action against you. These are expensive suits to defend and settle.

A common thread in many of these suits was that a disclosure and authorization was obtained, but it contained extraneous information rather than the mandated “a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured that consists solely of the disclosure.

In fact, just to show that the legal system has a sense of humor or is sadistic, depending on your point of view, one of the more common violations was a release of liability from the applicant on the disclosure and authorization to keep the employer out of court.

We advise you to review your disclosure form with your counsel. The law regarding disclosures and authorizations has not changed. What has changed is that there have been many successful, profitable cases and there are plaintiff attorney firms who are scouring the web for bad disclosures and there are professional job applicants applying at these businesses and they have no intention of working for the company.

Review your disclosure with counsel. VICTIG cannot provide you with legal advice, but we do make available to you a template disclosure for your consideration with counsel.