Your Disclosure for Obtaining Consumer Reports should not contain a liability waiver. It would be wise to review your disclosure and made sure it does not contain wording similar to that contained in the following two cases.
In a recent court case Sarmad Syed v M-I, LLC waiver of liability in FCRA disclosure “The panel held that a prospective employer violates 15 U.S.C. § 1681b(b)(2)(A) when it procures a job applicant’s consumer report after including a liability waiver in the same document as a statutorily mandated disclosure. The panel also held that, in light of the clear statutory language that the disclosure document consist “solely” of the disclosure, a prospective employer’s violation of § 1681b(b)(2)(A) is “willful” when the employer includes terms in addition to the disclosure, such as the liability waiver here, before procuring a consumer report or causing one to be procured.” (Page 2)
Page 8 of the complaint contains the wording of the release: “The liability waiver at the heart of the present dispute reads as follows: I understand the information obtained will be used as one basis for employment or denial of employment. I hereby discharge, release and indemnify prospective employer, [the background screening provider]., their agents, servants and employees, and all parties that rely on this release and/or the information obtained with this release from any and all liability and claims arising by reason of the use of this release and dissemination of information that is false and untrue if obtained by a third party without verification.”
In another similar case, Kelly Services Inc. has agreed to settle a class action lawsuit alleging it violated the Fair Credit Reporting Act by conducting background checks on job applicants and employees without disclosures that were required by law.
According to the Kelly class action lawsuit, the background check authorization disclosure included a waiver and disclaimer that released Kelly from any liability, which is prohibited under the FCRA.
The first allegedly improper sentence stated: “To the fullest extent permitted by law, I release Kelly, its employees, agents, successor and assigns, from any and all claims, actions or liability whatsoever that are in any way related to the procurement of a consumer report about me, or any subsequent investigation(s) of my background or personal history.”
The second allegedly improper sentence stated: “I understand that this Authorization is not a contract for continued employment and does not alter the at-will nature of my employment or offered employment.”
