Fair Credit Reporting Act Class Action Defeated.

In June 2018, Larson & Gaston’s employment litigation lawyers, led by Victor Cosentino, defeated a certified, nationwide, federal class action in the Central District of California for alleged violations of the Fair Credit Report Act’s (FCRA) authorization, disclosure and notice provisions, 15 U.S.C. § 1651b.

The case was brought against a national motor carrier, a client of the firm’s transportation practice. The class, which was certified by the court, consisted of thousands of employees and applicants throughout the United States. The Plaintiffs alleged that the motor carrier did not comply with FCRA’s authorization, disclosure, and notice provisions through its job application process because though the employer provided its FCRA disclosure form (as well as a Pre-Employment Screen Program disclosure and authorization form from the Federal Motor Carrier Safety Administration), at the same time as other employment application documents. Plaintiffs alleged that Defendant violated the “stand-alone” document provision of the FCRA through its job application process.

That section of the FCRA states:

(2) Disclosure to consumer

(A) In general Except as provided in subparagraph (B), a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless-

(i) a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; and

(ii) the consumer has authorized in writing (which authorization may be made on the document referred to in clause (i)) the procurement of the report by that person.

The parties brought cross-motions for summary judgment. The Central District Court ruled in favor of the Defendant motor carrier, rejecting plaintiffs’ job application process theory of liability and finding that the undisputed facts established that Defendant provided job applicants with the required authorization and stand-alone disclosure before running background checks on them, as mandated by the FCRA.

Claims of technical violations of the Fair Credit Reporting Act are becoming more common. Employers should review their FCRA compliance practices with legal counsel on a regular basis.