Friday, May 14, 2010

employment - Fair Credit Reporting Act

Smith v. HireRight Solutions, Inc. - ED PA. - May 11, 2010 (20 pp.)

Defendant's motion to dismiss Plaintiff’s Complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) denied.

The litigation was initiated as a consumer class action based upon Defendant’s alleged willful violation of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681, et seq. (“FCRA”). The action is brought on behalf of the thousands of employment applicants throughout the country who have purportedly been the subject of prejudicial, misleading, and inaccurate background reports performed by Defendant and sold to employers.

According to the facts set forth in the Complaint, Defendant is a consumer reporting agency (“CRA”), which maintains consumer files containing public record information, including the criminal record history of individuals. Defendant sells these consumer files to potential employers – consisting of a customer base of more than 28,000 businesses across the country – wishing to investigate the criminal history of various job applicants. Under the FCRA, Defendant, as a CRA, is required to notify the consumer of the fact that it is reporting public record information and to whom that information is being reported. Defendant must also follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates. The Complaint alleges, however, that, as a matter of practice, Defendant neither notifies the consumer contemporaneously of its reporting of adverse public record information, nor does it maintain strict procedures designed to insure that such information is complete, up-to-date, and accurate. Moreover, according to the Complaint, Defendant regularly reports single incidents multiple times so that the consumer’s criminal record history appears much more serious than it actually is. By the time the consumer is made aware of the inaccurate and duplicative reporting, the report has already been sold to the requesting employer and become the basis of an employment decision.