California Court of Appeal rejects ‘no harm no foul’ rule

It’s easy to make a technical mistake when conducting employment background checks, and you might think liability for that mistake disappears if you hire the candidate. No harm, no foul, right? Not according to the California Court of Appeal.

After three years of employment,  pre-hire investigation is challenged

In June 2018, Tina Parsonage applied for a job with Wal-Mart. A few days later, she accepted an offer of employment as a sales associate conditioned on successfully passing a background check. She electronically viewed and acknowledged receipt of a “Background Report Disclosure” and electronically signed a “Background Report Authorization form” to permit Wal-Mart to order the background check. The disclosure form was 14  pages long.

The “California Disclosure” began at page 9 and stated, “Wal-Mart will order an investigative consumer report on you in connection with your employment application, and if you are hired, or if you already work for Wal-Mart, may order additional such reports on you for employment purposes. Such reports may contain information about your character, general reputation, personal characteristics, and mode of living.” The disclosure listed six consumer reporting agencies, complete with their corresponding addresses, websites, and telephone numbers. Above the list, the disclosure stated, “You may call Wal-Mart Global Security . . . to find out which [consumer reporting agency] we used from the list.”