Parsonage v. Wal-Mart Clarifies ICRAA Standing in California
On February 4, 2026, the California Court of Appeal, Fourth Appellate District, Division One, issued a published decision in Parsonage v. Wal-Mart Associates, Inc. that materially affects how California employers should assess risk under the Investigative Consumer Reporting Agencies Act (ICRAA). The court held that an employee or job applicant does not need to prove actual harm, damages, or an adverse employment action to have standing under ICRAA. A statutory violation alone is sufficient.
Because ICRAA authorizes statutory damages of up to $10,000 in individual actions, the decision significantly heightens exposure for employers that use noncompliant background check disclosure or authorization forms, even where the applicant is hired and experiences no negative employment outcome.
Background and Facts
Tina Parsonage applied for employment with Wal-Mart in June 2018. As part of the hiring process, Wal-Mart required her to authorize a background check and provided an electronic disclosure and authorization form.
The disclosure packet consisted of fourteen pages. The California disclosure appeared several pages into the document and stated that Wal-Mart would obtain an investigative consumer report that could include information regarding the applicant’s character, general reputation, personal characteristics, and mode of living. Instead of identifying a single investigative consumer reporting agency, the disclosure listed six different agencies and instructed applicants to contact Wal-Mart to determine which agency had been used.
Wal-Mart later mailed Parsonage a copy of her background report, which identified First Advantage Background Services Corp. as the reporting agency. Parsonage was hired and began working for Wal-Mart.
In 2021, Parsonage filed suit alleging that Wal-Mart violated ICRAA by failing to provide a clear and conspicuous standalone disclosure that identified the investigative consumer reporting agency conducting the investigation, as required by Civil Code section 1786.16. She sought statutory damages under Civil Code section 1786.50.
Wal-Mart moved for summary judgment on the ground that Parsonage lacked standing because she suffered no injury. The trial court agreed, reasoning that Parsonage had been hired, received a copy of her report, and experienced no adverse employment action.
The Court of Appeal’s Decision
The Court of Appeal reversed and held that ICRAA does not require a plaintiff to show any concrete injury beyond establishing a statutory violation.
The court explained that standing in California courts is governed by legislative intent, not by federal Article III “injury in fact” consitutional law principles. The Legislature may define the violation of a statutory right itself as sufficient injury to confer standing, and ICRAA does exactly that.
Civil Code section 1786.50 provides that a user of information who fails to comply with any requirement of ICRAA is liable to the consumer for actual damages or $10,000, whichever is greater. The statute does not condition recovery on proof of harm, adverse employment action, or economic loss. The court emphasized that the Legislature intentionally designed ICRAA to address situations where harm may be difficult or impossible to prove.
The court also relied on ICRAA’s legislative history, noting that the statute was enacted to provide stronger consumer protections than the federal Fair Credit Reporting Act and to deter noncompliance through meaningful statutory remedies. Requiring proof of injury, the court explained, would undermine the statute’s deterrent purpose.
Why the Disclosure Violation Mattered
The court rejected Wal-Mart’s characterization of the alleged violations as merely technical. ICRAA requires a standalone disclosure that clearly identifies the investigative consumer reporting agency conducting the investigation. Listing multiple agencies and requiring the applicant to make additional inquiries obscures the notice required by the statute and interferes with the consumer’s ability to identify, contact, and correct information with the reporting agency.
Because the statute focuses on compliance with disclosure requirements, not downstream consequences, the absence of an adverse employment decision did not defeat standing.
Practical Implications for California Employers
The Parsonage decision reinforces that ICRAA is a strict compliance statute. Employers face potential liability even when an applicant is hired and even when no actual damages can be shown.
Employers should carefully review background check disclosure and authorization forms used in California. The disclosure must be a standalone document and must identify the specific investigative consumer reporting agency that will conduct the investigation. Multi-state forms, combined disclosures, and forms that list multiple possible agencies present heightened risk.
The decision also underscores that California courts will not import federal standing requirements into state statutory schemes where the Legislature has chosen a different approach. Compliance failures that might appear minor can still carry significant statutory exposure.
For employers operating in California, ICRAA compliance should be treated as a substantive risk issue rather than a technical formality.
What Is the ICRAA and What Does It Require?
The Investigative Consumer Reporting Agencies Act (ICRAA) is codified at California Civil Code sections 1786 through 1786.64. It regulates the procurement and use of investigative consumer reports in California, including reports obtained for employment, insurance, and housing purposes.
For employment purposes, an investigative consumer report is broadly defined to include any report in which information about an individual’s character, general reputation, personal characteristics, or mode of living is obtained through any means, including background checks that go beyond basic credit information.
Before procuring an investigative consumer report for employment purposes, an employer must satisfy several statutory requirements. Most critically, the employer must provide the applicant or employee with a clear and conspicuous written disclosure, in a document that consists solely of the disclosure, stating that an investigative consumer report may be obtained. The disclosure must identify the specific investigative consumer reporting agency conducting the investigation, including its name, address, and telephone number, and must describe the nature and scope of the investigation.
The employer must also obtain the individual’s written authorization before the report is procured. In addition, the employer must certify to the reporting agency that it has complied with ICRAA’s disclosure and authorization requirements.
ICRAA further requires that the consumer be provided with a copy of the investigative consumer report and be informed of their rights to review and dispute the accuracy of the information. These requirements are intended to ensure transparency, accuracy, and meaningful opportunity for correction.
Enforcement is addressed in Civil Code section 1786.50. A reporting agency or user of information that fails to comply with any requirement of ICRAA is liable to the consumer for actual damages or, in individual actions, statutory damages of $10,000, whichever is greater, along with attorneys’ fees and costs. Punitive damages may also be available for willful or grossly negligent violations.
As Parsonage v. Wal-Mart makes clear, liability under ICRAA turns on compliance with the statute’s requirements, not on whether the employer’s actions caused demonstrable harm.