California Court Allows Case to Move Forward Due to Background Check Form Technical Violation

04.28.2026

On February 4, 2026, the California Fourth Appellate District, Division One, held that an employee or job applicant does not need to prove actual harm beyond establishing a statutory violation to have standing under the California Investigative Consumer Reporting Agencies Act (ICRAA). (Parsonage v. Wal-Mart (2026) 118 Cal. App. 5th 399.) The court concluded that the California Legislature intended the ICRAA to provide stronger consumer protections than its federal counterpart—the Fair Crediting Reporting Act (FCRA): - stating, “It specifically was enacted to correct the shortcomings of the FCRA, including the requirement of proving actual damages.”

Background on the ICRAA

An “investigative consumer report” under ICRAA is a “consumer report in which information on a consumer’s character, general reputation, personal characteristics, or mode of living is obtained through any means.” (Civil Code § 1786.2, subd. (c).) An employer cannot obtain this report unless it complies with ICRAA’s disclosure and consent requirements. Section 1786.16 requires that for reports sought for employment purposes other than suspicion of wrongdoing the employer must provide a written disclosure to the consumer and obtain their written authorization. The ICRAA disclosure must be provided as a stand-alone form and not combined with other documents, such as the federal Fair Credit Reporting Act (FCRA) disclosure, an authorization, or other state disclosures. (See Gilberg v. California Check Cashing Stores, LLC (9th Cir. 2019) 913 F.3d 1169.)

Parsonage v. Walmart

In June 2018, Tina Parsonage applied to work at Wal-Mart. Shortly after, she accepted an offer of employment as a sales associate conditioned upon successfully passing a background check. Parsonage 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 included six agencies that could be used if Wal-Mart wanted to order an investigative consumer report and was included as part of the “Background Report Disclosure” package that was located on the ninth page of the fourteen-page package.

Parsonage alleged that by including six agencies instead of one in the disclosure, Wal-Mart failed to make the disclosure in a clear and conspicuous manner in a standalone document. She also alleged that Wal-Mart failed to provide a checkbox to request a copy of the investigative consumer report and did not supply the required certification of compliance to the furnishing investigative consumer reporting agency before procuring the investigative consumer report. Parsonage sought recovery of “statutory damages in the amount of $10,000 for each ICRAA violation or, in the alternative, actual damages in an amount according to proof (whichever is greater), as well as attorneys’ fees, costs, and punitive damages.”

Wal-Mart moved for summary judgment on the sole basis that Parsonage lacked standing to pursue her ICRAA claim because she had not suffered any harm from the technical violations of ICRAA (i.e., she was not rejected from employment) during Wal-Mart’s onboarding process. Parsonage argued that she had standing under ICRAA to recover the statutory sum of $10,000 for a violation without any showing of harm because Wal-Mart violated ICRAA’s statutory requirements. The court ruled against Wal-Mart and found that the statutory form violation alone was sufficient to confer standing to Parsonage, allowing the case to move forward.

How Does This Impact California Employers?

In light of the Parsonage decision, employers can face liability regardless of whether the employee or job applicant was harmed by not getting the job or promotion. Now, potential plaintiffs merely have to show noncompliance with the disclosure requirements of ICRAA and can potentially be entitled to actual damages or $10,000, whichever is greater. Employers should review their disclosure packages for compliance with the exacting requirements of the ICRAA.

Employers with questions regarding this Alert or ICRAA compliance may contact the author of this Alert or their usual employment counsel at AALRR.