Nilsson agreed to “waive all [her] legal rights and causes of action to the extent that the Mesa, Arizona, Police Department investigation (for purposes of evaluating [her] suitability or application for employment) . . . violate[d] or infringe[d] upon . . . [her] legal rights and causes of action . . .” In addition, Nilsson: [A]gree[d] to hold harmless and release from liability under any and all possible causes of legal action the City of Mesa, Arizona Police Department, their officers, agents, and employees for any statements, acts, or omissions in the course of the investigation into [her] background, employment history, health, family, personal habits and reputation.
Ultimately, Nilsson was denied employment allegedly based on a negative psychological evaluation. She sued under the ADA, Title VII (for retaliation) and state law.
The Court of Appeals held that the ADA claim, based on denial of employment due to a mental disability, was barred by the release. However, the court said that the Title VII claim was different. The release covered the entire background and investigation process, but did not cover the interview. Nilsson claims Mesa asked improper questions about a prior EEOC proceeding. That claim was permitted to proceed to the merits. (The Ninth Circuit then said summary judgment was properly granted).
Of note, the opinion does not discuss the Fair Credit Reporting Act and its potential effect on the case. In addition, the Court first analyzed whether Nilsson knowingly and voluntarily released the claims. The Court found Nilsson had the necessary education and experience to sign the release. The release also advised her to consult with counsel if she did not understand it.
So, at least where the employee is sufficiently sophisticated to understand a release, a relatively simple release in an application bars claims based on pre-hire background checks, medical examinations, etc.
The case is Nilsson v. City of Mesa.