California Appeal Court Limits Fair Chance Act Damages Exposure

A published California Court of Appeal decision in McInerney v. Regents of the University of California gives employers meaningful relief under the California Fair Chance Act (CFCA). The court held the CFCA does not permit a court or jury to "second-guess" an employer's individualized assessment of an applicant's conviction history, rejecting the argument advanced by the California Civil Rights Department that the assessment's outcome must satisfy the statute's "direct and adverse relationship" standard. The panel also held the CFCA sets no seven-year limit on considering convictions, while noting that relying on older convictions in a Title VII or FEHA disparate-impact claim can create a rebuttable presumption that they are not job-related and consistent with business necessity. Critically, a plaintiff seeking damages for technical procedural violations, such as deficient notice, must prove actual harm — that the employer would have hired the applicant but for the deficiency. The court contrasted the CFCA with New York's ban-the-box law and California's ICRAA, which allow fixed statutory damages. For employers screening applicants with criminal records in California, the ruling narrows class-action and agency exposure while leaving process compliance, local fair chance ordinances (Los Angeles city and county, San Diego County, San Francisco) and FCRA duties in place; watch for further appellate splits and the surge in FCRA class actions Littler reports.