Unanimous Calif. Supreme Court Ruling Hits Driver Background Checks

In what will likely be considered as a landmark employment law case, a unanimous ruling by the California Supreme Court sided with current and former school bus drivers who were subjected to background investigations arising from First Student’s acquisition of Laidlaw.

Some observations from the plaintiff’s attorneys were also received on Aug. 27, and are included towards the end of this article.

The case is Eileen Connor vs. First Student, Inc. et al., which was filed in Los Angeles County Superior Court, No. S229428, with the opinion published on Aug. 20.

According to Bloomberg Law, “The justices upheld a lower court ruling that school bus transportation company First Student Inc., part of FirstGroup, Plc, failed to adequately notify and obtain consent from former Laidlaw International, Inc. bus drivers and aides before it conducted background checks on 54,000 workers. The reports were ordered after First Student bought Laidlaw in 2007.”

Connor worked as a school bus driver for Laidlaw Education Services, and she alleged that First failed to obtain her written authorization to conduct the background check, as required by the Investigative Consumer Reporting Agencies Act (ICRAA).

Joyce Cutler wrote on Aug. 20 that, “First Student had to comply with the more protective Investigative Consumer Reporting Agencies Act—designed to give consumers a chance to correct information and address identity theft—regardless of the company’s compliance with the less-stringent requirements in the Consumer Credit Reporting Agencies Act, the California Supreme Court said.”

Whether the ruling will also apply to related aspects of the typical hiring process, such as requiring pre-employment drug testing, could conceivably be the focus of new cases.

According to Law360, “More than 30 nonprofit organizations and the California attorney general’s office had filed amicus briefs [friend of the court briefs] arguing that the laws are constitutional.”

The California Supreme Court’s statement appears to extend the ruling beyond just First Student, to cover any and every applicant in California who may be the subject of a background check. Such checks would possibly be on that person’s criminal history and payroll status, conviction record, DMV driving record of infractions, sex offender status (especially in the case of schools), financial or credit history, social media comments, tweets, Facebook profiles, and so on.

The 15-page ruling ordered the case to be returned to an appeals court and then to the Los Angeles trial court. Thus, there may still be some weeks, months, or even (very unlikely) a few years, for most companies outside of the school bus industry, to come into compliance. However, all school districts, plus corporations, public or private, large or small, that hire employees in the State of California, are almost certainly going to need to start complying and change (i.e., correct) all of their job applications.

That looks especially true for their online job application forms, which are normally most visible to the public. Therefore, hungry attorneys may want to explore filing cases (similar to how they have attacked small retail businesses for noncompliance with the ADA), against any employer in California who doesn’t include the now-required sign-off form in their online posting in Monster, CareerBuilder, Indeed and other online job posting services. By extension, the same would apparently hold true for their own corporate websites.

A specific statement of agreement with every job hunter, will likely now have to be included in every application form, that requires every job applicant to sign, date and check the box that says, “I hereby give X Company or X School the legal right to conduct any kind of criminal or financial background search they like, before or after a job offer is made or employment begins. Employment will not be allowed without signing this document in advance of a job offer being made.” Or words to that effect.

Not known at the moment is whether the Aug. 20 ruling will apply to all categories of workers, such as permanent vs. part-time, project, contract vs. temp, and so on. At this early time, though, it appears that the overriding issue will revolve around exactly what a job applicant receives in print or online. That especially means the wording has to specifically state the applicant has affirmatively granted advance permission for background checks, whether that person is eventually hired or not.

Legal experts have yet to publicly weigh in on the case and conduct detailed analyses of exactly what specific wording or document constitutes affirmative advance permission. One key unresolved question is whether independent contractors are covered by the ruling or not. They may not be, since independent contractors are not generally considered to be employees. But in the last few years in California, the definition has definitely tightened of who can legally be considered to be an independent contractor. Or they may be covered, since independent contractors do have to receive some amount of very limited instructions from the employer, in order to be used by the employer.

However, what is clear, is that practically all California-based HR departments, whether these are at individual schools, school districts, or retail stores, better quickly learn to start keeping written documentation showing that affirmative permission has been received from every applicant who is rejected or hired. Basically, any person who a school district comes into contact with regarding being hired, qualifies for having to follow the ruling requirements.

The same may potentially apply to executives or administrators who have hiring and firing status. Theoretically, by extension, this could even apply to executive search firms and recruiters, or even trade publications, magazines and newspapers that publish job ads, as the ripple effect continues further down the hiring line, to catch more and more organizations in the “tuna net.” All of which would be happily examined by eager attorneys who may be trolling for new potential cases and plaintiffs.

Not generally known at this point is exactly what penalties in all types of situations and circumstances may apply for minor vs. major infractions involving the advance permission documentation, or how and by whom these would be enforced, unless the two relevant state laws are carefully studied. This case may have suddenly made employment law the new “go to” specialization for newly-graduated law students. As Catha Worthman, Feinberg Jackson Worthman & Wasow LLP partner and co-counsel for Connor, told Bloomberg Law, “Violations of the Investigative Act carry a $10,000-per-violation penalty.”

Small companies and vendors appear to be first in line to be hurt the most, because at least initially, in general, they just aren’t going to uniformly be very current on new employment law cases like this. Not like the larger public corporations would be, for example, that have fully-staffed HR departments, or major governmental organizations or universities that have large staffs. On the other hand, many school districts throughout California will definitely have to quickly comply, since First Student, and other similar companies, are their clients.

Law360 noted, “Catha Worthman of Feinberg Jackson Worthman & Wasow LLP, counsel to the class, said she and her co-counsel are looking forward to representing their clients on the merits when the case returns to trial court. ‘This decision is an important win for workers in that they can now rely on the protection of background check laws that require disclosure and authorization before employers can run background checks on them,’” Worthman explained.

Plaintiff’s attorney for Eileen Connor, Hunter Pyle, told STN, “We are honored to represent this group of First Student and First Transit bus drivers, who have been fighting for their right to be free from illegal background checks for almost a decade. We look forward to returning to the trial court, and to winning this case for our clients.” Pyle is a partner at Hunter Pyle Law in Oakland, Calif.

The other participants in the case have been contacted for comment on the ruling.

Plaintiff’s attorney Catha Worthman today (Aug. 27) stated to STN, “I’d just clarify that the case is important because it confirmed the constitutionality of California’s stricter background check law, the ICRAA. The court hasn’t ruled on the merits yet, although we believe it is a simple case and hope that the court will rule in favor of our clients They include bus drivers and aides who had background checks run without the disclosure and authorization the law requires.”

Worthman also reiterated and concurred with Pyle’s quote in Bloomberg in separate comments today to STN, “The implications are that these two laws are relatively straightforward and easy to follow. So landlords, employers, banks, anyone seeking to run a background check that falls in one or both of these statutes will continue have to comply with them.”

Charlie Hood, Executive Director of the National Association of State Directors of Pupil Transportation Services, told STN that in May 2018, the association released a new position paper, titled “America’s Professional School Bus Drivers: Their Importance to Student Safety and Educational Success.” (http://www.nasdpts.org/Papers/index.html.)

He said the paper “highlights and supports the important role that school bus drivers play in ensuring all students have safe transportation to school.”

Hood noted that, “Moreover, school bus drivers are an integral component of public education, in that school buses play a critical role in ensuring students have equitable access to educational programs. The paper also outlines what a complex job school bus driving is, requiring a range of skills that go way beyond merely maneuvering the school bus.”

He said the paper “discusses a number of important regulations and recommended best practices relating to driver licensure, training, qualifications, and performance. Among those is the recommendation that, ‘A check of federal and state databases for criminal background should be conducted on all applicants for a school bus driving position.’”

According to Hood, “The listed regulations and recommended practices are well within the norm among state and local entities throughout the country that recruit and retain school bus drivers. They comprise normal and reasonable safeguards and expectations among parents, administrators, and professional school bus drivers themselves.”

Hood commented that this STN article “points to a ruling that is directly pertinent to California state law and provides important food for thought for any entity throughout the nation relating to the need to ensure fairness and legal safeguards for both applicants and incumbents of school bus driving positions without compromising safety.”

He added that, “Naturally, we support the authority and responsibility of any hiring entity to ensure that its practices are fully compliant with applicable federal and state laws. NASDPTS has no specific, additional knowledge of the California case, however, and it is not within our authority or scope to comment on the case or its merits.”

In the near future, some cases may revolve around how soon a school district learned of the Aug. 20 ruling, and how soon the school district implemented the prior notice requirement—and how well the permission signature document requirement has been worded and enforced. This is where trade associations will likely want to jump in to immediately inform their members of the results of the class action case, and their need to immediately comply. Members in other states besides California may also be exposed to the potential filing of new cases in coming months, as the ripple effect in the national school district pond continues to widen from coast-to-coast.

In conclusion, it appears that this case is going to apply to any and all corporations and nonprofits, large or small, public or private, but especially the big organizations that have the means and experience to comply before others do—or any entity that normally receives the highest quantity of job applications. The ruling also should apply to all governmental organizations, such as city and state governments, special districts and agencies. Basically, it will apply to any employer who runs any kind of a formal background check beyond simply phoning a reference or two.

Last modified onWednesday, 12 September 2018 16:54