The Supreme Court of California (‘the Supreme Court’) issued, on 20 August 2018, its decision in Eileen Connor v. First Student, Inc., et al, in which it affirmed the Court of Appeal’s judgment, holding that First Student was not exempted from the requirement to obtain written authorisation under the Investigative Consumer Reporting Agencies Act (‘ICRAA’), regardless of whether the Credit Reporting Agencies Act (‘CCRAA’) also applied. In particular, Connor alleged that First Student had failed to obtain her written authorisation to conduct the background check, in violation of ICRAA.
First Student asserted that ICRAA was unconstitutionally vague as it overlapped with CCRAA, and claimed that ICRAA and CCRAA covered the same subject matter, making it unclear which statute applied in the context of employment background checks. As originally enacted, ICRAA applied to consumer reports that included character information obtained only through personal interviews, and CCRAA to consumer credit reports that included information relating to a consumer’s credit worthiness, credit standing or credit capacity. The California legislature (‘the Legislature’) later amended ICRAA to eliminate the personal interview limitation and expand the ICRAA’s scope to include character information obtained under CCRAA or obtained through any other means.
Potential employers can comply with both statutes without undermining the purpose of either
In reaching its conclusion, the Supreme Court considered the Legislature’s intent and the statutes’ underlying purpose, finding that both statutes were intended to serve complementary but not identical goals, and noted that potential employers can comply with both statutes without undermining the purpose of either. In particular, it clarified that, “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.”
In addition, the Supreme Court indicated that Connor’s report fell within the scope of both ICRAA and CCRAA as it contained information bearing on both a consumer’s creditworthiness and on her character, and found that, “such duality does not make legal compliance particularly difficult, much less impossible.”
BART VAN DER GEEST Junior Privacy Analyst