CA Supreme Court to Consider Constitutionality of ICRAA, CA’s Background Check Law

RSS Feed

California’s highest court will decide whether the appellate court correctly upheld the constitutionality of California’s background check law, the Investigative Consumer Reporting Agencies Act (“ICRAA,” Cal. Civ. Code § 1786, et seq.) in Connor v. First Student, Inc., No. B256075, B256077 (2nd Dist. Div. 4, Aug. 12, 2015) (slip op. available here), rev. granted, 360 P.3d 1022 (Nov. 24, 2015). The Connor appeal was filed by Eileen Connor and Jose Gonzalez, two bellwether plaintiffs among the roughly 1,200 bus drivers who filed a series of coordinated mass actions against employers First Student, Inc. and First Transit, Inc. and against credit reporting agency HireRight, Inc. for violations of the ICRAA. Specifically, the drivers asserted that First Student violated the ICRAA by running background checks without the proper disclosure language or written consent required under the ICRAA. First and HireRight sought to dismiss the lawsuits on the ground that the ICRAA is unconstitutionally vague and moved for summary judgment, which was granted by Judge Wiley of the Los Angeles County Superior Court. Plaintiffs Connor and Gonzalez separately appealed and their cases were later consolidated (the consolidation order was subsequently vacated).

In Connor, the Second Appellate District overturned the trial court’s grant of summary judgment for the employer, holding that the ICRAA is not void for vagueness just because the Consumer Credit Reporting Agencies Act (“CCRAA,” Cal. Civ. Code § 1785.1, et seq.)—another California statute that regulates consumer reporting agencies—might also apply to those same background checks. Slip op. at 3 (“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.”). In so holding, the Connor court expressly disagreed with a prior decision by a sister court in the Fourth District in Ortiz v. Lyon Management, 157 Cal.App.4th 604 (2007), which held that the ICRAA was “unconstitutionally vague” because both the ICRAA and CCRAA governed certain background reports, and agreed with the plaintiff that “Ortiz was wrongly decided because it failed to consider case law governing the interpretation of overlapping statutes.” Slip op. at 5, 9 (rejecting the employer’s vagueness argument that was “based upon the faulty premises that (1) any given consumer report must be governed by either the CCRAA or the ICRAA, but not both, and (2) the CCRAA ‘authorizes’ certain conduct.”). The Connor court also found that the application of ICRAA and CCRAA are not mutually exclusive in that the employer can comply with each act without violating the other “because each act expressly excludes those specific reports governed by the other act.” Id. at 14.

The Connor decision is a long-awaited and much-needed victory for plaintiffs in ICRAA litigation. As noted in Connor, “two federal district courts have followed and extended Ortiz, and no court has criticized or departed from it.” Slip op. at 5. Indeed, Judge Wiley stated that he found the Ortiz ruling “surprising,” but was nonetheless bound by it to rule in favor of First Student and HireRight on their constitutionality challenge. Thus, prior to Connor, the fate of ICRAA litigation involving background checks within the employment context was grim; no claim under ICRAA would have survived no matter how egregious the violation. Such a result was significant because “generally, the ICRAA imposes greater obligations and stricter limitations, and allows greater remedies.” Id. at 2. Connor, however, gave new life to claims arising under ICRAA; it is therefore of critical importance that Connor be kept alive.

Authored by: 
Suzy Lee, Associate