On February 18th, a federal judge in Illinois denied Sprint’s motion to dismiss a class action lawsuit brought against the company in October of 2015.  In the original compliant the plaintiff claimed Sprint violated the requirement of the Fair Credit Reporting Act (FCRA) by providing a disclosure form that contained extraneous information, including a release from liability statement, before running a background check report.  Per the FCRA, a background check for employment purposes may not be procured unless the subject of the check has received a clear and conspicuous disclosure that a background check may be performed. The disclosure must be in writing and in a document that consists solely of the disclosure.
If Sprint is found to have willfully violated the FCRA, statutory damages ranging from $100 to $1,000 per violation could be assessed. The class of complainants includes all applicants for which a background check report was procured dating back to October 20, 2013.
Sprint argued the case should be dismissed because there had been no actual harm to the applicants.  The judge, however, called on the basic tenants of the FCRA and stated the following in the ruling:
“Congress enacted the FCRA to protect consumer control over personal information the exposure of which, though often necessary in the modern economy, can result in a significant invasion of privacy and can jeopardize a consumer’s personal, reputational and financial wellbeing. The statute provides that when a person or entity willfully violates a mandate of the FCRA that is designed to protect these interests, the aggrieved consumer may recover statutory damages.”
The argument about tangible harm that Sprint raised is currently being considered by the US Supreme Court in the case of Spokeo, Inc. v. Robins. The question before the Court is can Congress give a plaintiff who suffers no concrete harm Article III standing by authorizing a private right of action based on a violation of a federal statute that provides for statutory damages, such as the FCRA does. A website operated by Spokeo provided personal information about individuals, including contact information, marital status, age, occupation, and certain types of economic information. In this case Thomas Robins sued the company, claiming that Spokeo willfully violated the Fair Credit Reporting Act (FCRA) by publishing false information about him on the website. Robins alleges that they overstated his income and therefore hurt his employment prospects. The case was originally dismissed by the district court but the U.S. Court of Appeals for the Ninth Circuit found for Robins, ruling that the allegation of a violation of a statutory right is sufficient injury to qualify for standing under Article III.  A Supreme Court reversal in this case could have a significant impact on the ability of plaintiffs to bring similar cases in federal court going forward.
No matter how these cases are ruled, employers should take time to review their background screening process to ensure compliance. To learn more about FCRA best practices check out Compliance with the FCRA on our website.
To read the full text of the Sprint FCRA case click here
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