We hate when clients get sued.

: there have been new changes in the law regarding FCRA Disclosures and Authorizations (what everyone in the industry used to simply call the “FCRA release”). Last year saw a 60% increase in FCRA litigation and there is a very good chance your forms are no longer compliant!

In an effort to help all our clients become compliant, we’ve prepared new form FCRA Disclosure and Authorizations, a new Investigative Consumer Report Disclosure, and refined the Drug and Alcohol release language that our clients can choose to use in connection with their IntelliApp.

A Recent Decision by the 9th Circuit Court Means New FCRA Disclosures and Authorizations are Necessary

At Tenstreet, we care about our customers and don’t want to see you end up in a lawsuit. So, we stay on top of the always changing legal landscape and try our hardest to get the word out about compliance. A recent decision by the 9th Circuit Court of Appeals raised the bar for compliance with the Fair Credit Reporting Act (FCRA) even higher.  This decision changed the law regarding disclosures and authorizations and as a result a great deal of our customers are no longer compliant (this is true across all industries, not just trucking). Specifically, the 9th Circuit found that any reference to state law or disclosures of state law within the FCRA Disclosure and Authorization violates the FCRA requirement for a “stand-alone” disclosure.  You can read more about this update in the law in our blog.

Legal disclaimer: The following information on specific laws and regulations does not constitute legal advice.  As always, compliance with federal, state and local laws is ultimately your responsibility.  We recommend that you consult with legal counsel to ensure your processes and procedures are fully compliant.

 Update your Disclosure and Authorization Language Now

Prior to this 9th Circuit Court Opinion it was very common to have state law disclosures within the FCRA disclosure and authorization.  In fact, a search of our system identifies that a majority of our customers are no longer FCRA compliant due to this change in the law.  A majority of the disclosures or authorizations we see in our system have references to California, Washington, or others, which was the best practice in the industry for many years. Indeed, if you previously implemented Tenstreet’s standard language or previous “HireRight” language, these had reference to state law and you are likely no longer compliant.

Our search also identified many other potential problems that our customers have with their FCRA disclosure and authorization language – such as outdated references to consumer reporting agencies, waivers of liability, and other information which could be considered extraneous information in an FCRA lawsuit. For example, if your disclosure or authorization still references USIS, it’s outdated and probably has the wrong address for HireRight. Likewise, if your disclosure or authorization uses the word “liability” or “waiver” it is not compliant due to prior court decisions specifically finding waivers of liability to be willful violations of the FCRA.

Outdated FCRA Disclosure and Authorization language could be extremely expensive! For example, in 2017 we saw an FCRA case regarding non-complaint disclosure and authorization language settle for $4.5 million. In that case, the court found that the employer willfully violated the FCRA because they had a waiver of liability in their disclosure and authorization language.  Don’t let this be your company. Update your language today!

Add an Investigative Consumer Report Disclosure

As you know, the FMCSA requires carriers to conduct an investigation into a driver’s safety performance history, which is likely to be considered an investigative consumer report. In recent FCRA cases, our external counsels who specialize in FCRA litigation have seen more allegations relating to investigative consumer reports. Specifically, the allegations are that references to an investigative consumer report within the FCRA disclosure (or the California disclosure) constitutes extraneous information in violation of the stand-alone disclosure requirement. Additionally, the FTC has issued an opinion letter which states that some of the required disclosure for investigative consumer reports can be in the FCRA disclosure, but some cannot. So, while you should still provide drivers with an investigative consumer report disclosure, it’s best to take out any reference to an investigative consumer report in your FCRA disclosure and add an entire page devoted solely to disclosures surrounding investigative consumer reports.

Be Wary of the Verbal Okay

There’s been some buzz in the industry suggesting that all you need is a verbal “okay” from the driver and then you can run all the background reports you need. Unfortunately, the law doesn’t make it that easy. While the FCRA does have a verbal exception that allows drivers to provide consent over the phone, the recruiter must first verbally tell the driver all the information in FCRA Summary of Rights, the disclosure, the authorization, and the 1681m notice (including the list of consumer reporting agencies and their contact information). Yes, all this information, every. single. time before you get the driver’s okay. Otherwise, it’s not a valid verbal consent. What’s more, verbal consents are explicitly deemed not sufficient for ordering both PSP and CDLIS. And even further, some states and cities prohibit the use of verbal notices.

Even if you get over the hurdles of verbally providing all the required information, your company is still at risk. Why? Because you need proof (actual evidence) that you provided the driver with this information and that they provided you with their consent. Otherwise, what’s to say the driver won’t claim that you didn’t provide the information or that consent was never given. In 2017/2018, we saw 15 of our customers sued by one individual claiming that the required notices weren’t given. All the carriers claimed to have provided the notices verbally. Even if they win (which is far from certain), these are very expensive lawsuits to defend.

By far, the best practice is to provide the required notices, disclosure and authorizations, and summaries of rights to the driver in writing and get a signature. We make it easy to get electronic signatures for all the required FCRA notices and summaries of rights. If the driver is legally talking to you on the phone, then that driver can sign a release in under a minute. Just use Tenstreet to send him a text or Pulse message while you’re on the phone. The driver accepts the notices, signs the authorizations, then you have what you need.

New Drug and Alcohol Release

While we were updating all the language, we updated our standard drug and alcohol release language as well. This is the release language required under 49 C.F.R. Part 391.23 and Part 40 to obtain DOT drug and alcohol information as well as to conduct employment verifications. We’ve just refined it a bit.

We Care About Compliance

Staying up to date on all the compliance changes can be a burden. We want you to know that we think about compliance all the time. We want to provide our customers as much information about compliance as possible, so you can make the best decisions for your company. As always, you are responsible for the compliance of your application and processes. Tenstreet strongly encourages you to have an FCRA-specific lawyer review your disclosures, authorizations, and hiring processes to ensure compliance. While we cannot look at your existing language and say you’re compliant, we’re happy to recommend an FCRA attorney who can.

That said, Tenstreet has prepared new form FCRA Disclosure and Authorization language, an Investigative Consumer Report Disclosure, as well as a newly-refined Drug and Alcohol Release. All of these are attached to the email the primaries at your company received earlier today – contact your account manager if you didn’t get them. Your company can choose to adopt this language and use it in connection with the IntelliApp – and we recommend you makes these changes ASAP!

Your To-do List:

  1. Update your FCRA disclosure and authorization language today! Even better, contact a qualified FCRA attorney and have your application, authorization language, pre-adverse/adverse action letters and hiring practices reviewed.
  2. Add an Investigative Consumer Report Disclosure to your process.
  3. Update your drug and alcohol release language.
  4. If you want to learn more about Disclosures and Authorizations, tune in to our Compliance 101 Deep Dive Webinar on Disclosures and Authorizations on March 21st at 2:00pm.
  5. When sending us updated language or in telling us that you’re choosing to adopt our sample language as your own, please be sure to include the Consumer Reporting Agencies you order background reports from (including the FMCSA if you order PSP). We need this to set everything up.

Questions?  Want to implement new language?  Contact your Account Manager or email [email protected].