Happy post-Thanksgiving! News flash for the background screening industry as well as users of background checks in California. The California Supreme Court has agreed to consider whether the Investigative Consumer Reporting Agencies Act (ICRAA) is unconstitutionally vague when applied to employee background checks because of its overlap with another California law, the Consumer Credit Reporting Agencies Act (CCRAA).
The California Supreme Court will review a decision by the Second Appellate District Court which held that ICRAA is not unconstitutionally vague.
Quick overview of California law. The ICRAA relates to non-credit related investigative consumer reports. An “investigative consumer report” under California law is a report which includes information on a consumer’s character, general reputation, personal characteristics, or mode of living. Contrast that with the CCRAA, which relates to “consumer credit reports,” including reports bearing on a consumer’s credit worthiness, credit standing or credit capacity. Now think of both of these reports in the employment screening context and consider that the ICRAA includes an additional authorization requirement not found in the CCRAA. The argument has been that there is overlap and confusion about which law applies when information in the report can potentially relate to both character information as well as creditworthiness information. The ICRAA covers character information and the CCRAA covers creditworthiness information.
Back to the case that the California Supreme Court will review. That is Connor v. First Student, case number S229428. The case involves bus drivers and investigative consumer reports under the ICRAA (aka background checks), with the bus drivers alleging that First Student did not obtain their prior written consent as required under the ICRAA, but not the CCRAA. Plaintiffs are seeking $10,000 statutory penalties per violation. At issue is the constitutionality of the ICRAA, and thanks to Connor there is a split in the California courts on this point. In a 2007 case, Ortiz v. Lyon Management Group, the court found that the ICRAA is unconstitutionally vague because one couldn’t determine whether unlawful detainer information constitutes “character” information covered by the ICRAA or “creditworthiness” information governed by the CCRAA. Most recently, the Court of Appeal of the Second Appellate District stated that they disagreed with Ortiz and that “there is nothing in either the ICRAA or the CCRAA that precludes application of both acts to information that relates to both character and creditworthiness. Therefore, we conclude the ICRAA is not unconstitutionally vague….” (Opinion p. 3)