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Court Rules Independent Contractor is Not an Employee for FCRA Purposes

The United States District Court for the Northern District of Georgia joined several other district courts by recently holding that the protections accorded for consumer reports obtained for “employment purposes” under the Fair Credit Reporting Act (FCRA) do not apply to independent contractors.  As most people are aware, the FCRA mandates that disclosures are clear and conspicuous and in stand-alone documents when the report is obtained for “employment purposes.”  “Employment purposes” is defined in the FCRA as “a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee.” (emphasis added)  The court found that, in this case, it was undisputed that the plaintiff was applying as an independent contractor and not as an employee.  As such, the court found that the FCRA’s protections did not apply in this instance.

While there appears to be a trend for employers under these circumstances, employers should still exercise caution, as some courts have also taken, and may continue to take, a broader view of the term “employment purposes.”

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Contact us to review your disclosures to help ensure compliance with the FCRA and other applicable laws.

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