Gilberg v. Cal. Check Cashing Stores, LLC, 17-16263

• Citation: 913 F.3d 1169
• Decision Date: 29 January 2019
• Docket Number: No. 17-16263,17-16263
• Parties: Desiree GILBERG, on Behalf of Herself, all Others Similarly Situated, Plaintiff-Appellant, v. CALIFORNIA CHECK CASHING STORES, LLC, a California Corporation; CheckSmart Financial, LLC, a Delaware Limited Liability Company, Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

913 F.3d 1169

Desiree GILBERG, on Behalf of Herself, all Others Similarly Situated, Plaintiff-Appellant,

v.CALIFORNIA CHECK CASHING STORES, LLC, a California Corporation; CheckSmart Financial, LLC, a Delaware Limited Liability Company, Defendants-Appellees.

No. 17-16263

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 15, 2018 San Francisco, California

Filed January 29, 2019

H. Scott W. Leviant (argued), Thomas Segal, and Shaun Setareh, Setareh Law Group, Beverly Hills, California, for Plaintiff-Appellant.

Timothy W. Snider (argued) and Chrystal S. Chase, Stoel Rives LLP, Portland, Oregon; Bryan L. Hawkins, Stoel Rives LLP, Sacramento, California; for Defendants-Appellees.

Before: Raymond C. Fisher and Milan D. Smith, Jr., Circuit Judges, and Lawrence L. Piersol, District Judge.^*

FISHER, Circuit Judge:

The widespread use of credit reports and background checks led Congress to pass the Fair Credit Reporting Act (FCRA) to protect consumers’ privacy rights. FCRA requires employers who obtain a consumer report on a job applicant to provide the applicant with a "clear and conspicuous disclosure" that they may obtain such a report (the "clear and conspicuous requirement") "in a document that consists solely of the disclosure" (the "standalone document requirement") before procuring the report. 15 U.S.C. § 1681b(b)(2)(A)(i). This appeal requires us to decide two questions: (1) whether a prospective employer may satisfy FCRA’s standalone document requirement by providing job applicants with a disclosure containing extraneous information in the form of various state disclosure requirements, and (2) whether the specific disclosure provided by the employer in this case satisfied the clear and conspicuous requirement.

We held in Syed v. M-I, LLC , 853 F.3d 492 (9th Cir. 2017), that FCRA contains "clear statutory language that the disclosure document must consist ‘solely’ of the disclosure." Id . at 496. Consistent with Syed , we now hold that a prospective employer violates FCRA’s standalone document requirement by including extraneous information relating to various state disclosure requirements in that disclosure. We also hold that the disclosure at issue here is conspicuous but not clear. Accordingly, we affirm in part, vacate in part and remand.¹

I. Background

In the process of applying for employment with CheckSmart Financial, LLC, Desiree Gilberg completed a three-page form containing an employment application, a math screening and an employment history verification. Two weeks later, Gilberg signed a separate form, entitled "Disclosure Regarding Background Investigation," that is the subject of this litigation. A copy of the disclosure is appended to this opinion. The form appears to have been printed in Arial Narrow, size 8 font.

Because the legal sufficiency of the FCRA disclosure provided to Gilberg is in question, we include the full text of the disclosure:

DISCLOSURE REGARDING BACKGROUND INVESTIGATION

DISCLOSURE AND ACKNOWLEDGMENT

[IMPORTANT — PLEASE READ CAREFULLY BEFORE SIGNING ACKNOWLEDGMENT]

CheckSmart Financial, LLC may obtain information about you from a consumer reporting agency for employment purposes. Thus, you may be the subject of a ‘consumer report’ and/or an ‘investigative consumer report’ which may include information about your character, general reputation, personal characteristics, and/or mode of living, and which can involve personal interviews with sources such as your neighbors, friends, or associates. These reports may include employment history and reference checks, criminal and civil litigation history information, motor vehicle records (‘driving records’), sex offender status, credit reports, education verification, professional licensure, drug testing, Social Security Verification, and information concerning workers’ compensation claims (only once a conditional offer of employment has been made). Credit history will only be requested where such information is substantially related to the duties and responsibilities of the position for which you are applying. You have the right, upon written request made within a reasonable time after receipt of this notice, to request whether a consumer report has been run about you, and the nature and scope of any investigative consumer report, and request a copy of your report. Please be advised that the nature and scope of the most common form of investigative consumer report obtained with regard to applicants for employment is an investigation into your education and/or employment history conducted by Employment Screening Services, 2500 Southlake Park, Birmingham, AL 35244, toll-free 866.859.0143, www.es2.com or another outside organization. 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. As a result, you should carefully consider whether to exercise your right to request disclosure of the nature and scope of any investigative consumer report.

New York and Maine applicants or employees only : You have the right to inspect and receive a copy of any investigative consumer report requested by CheckSmart Financial, LLC by contacting the consumer reporting agency identified above directly. You may also contact the Company to request the name, address and telephone number of the nearest unit of the consumer reporting agency designated to handle inquiries, which the Company shall provide within 5 days.

New York applicants or employees only : Upon request, you will be informed whether or not a consumer report was requested by CheckSmart Financial, LLC , and if such report was requested, informed of the name and address of the consumer reporting agency that furnished the report.

Oregon applicants or employees only : Information describing your rights under federal and Oregon law regarding consumer identity theft protection, the storage and disposal of your credit information, and remedies available should you suspect or find that the Company has not maintained secured records is available to you upon request.

Washington State applicants or employees only : You also have the right to request from the consumer reporting agency a written summary of your rights and remedies under the Washington Fair Credit Reporting Act.

ACKNOWLEDGMENT AND AUTHORIZATION

I acknowledge receipt of the NOTICE REGARDING BACKGROUND INVESTIGATION and A SUMMARY OF YOUR RIGHTS UNDER THE FAIR CREDIT REPORTING ACT and certify that I have read and understand both of those documents. I hereby authorize the obtaining of "consumer reports" and/or "investigative consumer reports" at any time after receipt of this authorization and, if I am hired, throughout my employment. To this end, I hereby authorize, without reservation, any law enforcement agency, administrator, state or federal agency, institution, school or university (public or private), information service bureau, employer, or insurance company to furnish any and all background information requested by ESS, 2500 Southlake Park, Birmingham, AL 35244, toll free 866.859.0143, www.es2.com , or another outside organization acting on behalf of CheckSmart Financial, LLC , I agree that a facsimile ("fax"), electronic or photographic copy of this Authorization shall be as valid as the original.

California applicants or employees only : By signing below, you also acknowledge receipt of the DISCLOSURE REGARDING BACKGROUND INVESTIGATION PURSUANT TO CALIFORNIA LAW. Please check this box if you would like to receive a copy of an investigative consumer report or consumer credit report if one is obtained by the Company at no charge whenever you have a right to receive such a copy under California law.

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Minnesota and Oklahoma applicants or employees only : Check this box if you would like to receive a free copy of a consumer report if one is obtained by the Company.

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New York applicants or employees only : By signing below, you also acknowledge receipt of Article 23-A of the New York Correction Law.

After receiving Gilberg’s signed disclosure form, CheckSmart obtained a criminal background report, which confirmed that Gilberg did not have a criminal record. CheckSmart did not obtain a credit report. CheckSmart hired Gilberg, who worked for CheckSmart for five months before voluntarily terminating her employment.

Gilberg then brought this putative class action against CheckSmart, alleging two claims relevant here: (1) failure to make a proper FCRA disclosure and (2) failure to make a proper disclosure under California’s Investigative Consumer Reporting Agencies Act (ICRAA).

FCRA prohibits an employer from obtaining an applicant’s consumer report without first providing the applicant with a standalone, clear and conspicuous disclosure of its intention to do so and without obtaining the applicant’s consent:

Except as provided in subparagraph (B), a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless —

(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) (emphasis added).

California imposes its own FCRA-like disclosure requirements. See Cal. Civ. Code §§ 1785.20(5)(a), 1786.16(a)(2)(B). Under ICRAA:

(2) If, at any time, an investigative consumer report is sought for employment purposes other than suspicion of wrongdoing or misconduct by the subject of the investigation, the person seeking the

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