Beware of FCRA Lawsuits – Spokeo Inc. v. Robins

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The U.S. Supreme Court has announced that it will review a very significant case that impacts employers. The Fair Credit Reporting Act (FCRA) case involves Plaintiff Thomas Robins who alleged that Defendant Spokeo Inc. (Consumer Reporting Agency) issues consumer reports that violate the FCRA. The case questions whether or not someone can sue under a statute, [and possibly bring a class action] simply based on a technical violation. The case disregards whether or not that individual actually suffered an injury.

In Spokeo Inc. v. Robins, Robins alleges that the reports that Spokeo provides with his name are inaccurate and violate the FCRA by failing to provide him with mandatory notices. For instance, the reports indicate that he has more education and employment experience than he has and that his financial situation is better than it actually is. He claims that the inaccurate information will negatively affect his employment prospects, credit, etc.

The Ninth Circuit found that Robins did not suffer damages, but held that the statutory FCRA violation satisfied Article III’s injury-in-fact requirement. The Sixth, Tenth, and D.C. Circtuis joing the Ninth Circuit’s holding. The Second and Fourth circuits have found the opposite. Spokeo’s petition for review of the Ninth Circuits decision stated, “The need to resolve the conflict is especially acute because this fundamental question of Article III jurisdiction has significant implications for class-action litigation under a statue that generates dozens of class actions in the federal court every year.”

Class action lawsuits under the FCRA have increased dramatically. The FCRA generates dozens of federal class actions each year. Since the Ninth Circuit’s decision, the number has skyrocketed to 29 FCRA class actions filed in the first four months of this year. These type of cases claim that employers are failing to get consent for background checks and provide the required statutory disclosures. According to the FCRA, if an employer decides not to hire someone based on a report (i.e. background check), then the employer is required to provide a preadverse action notice.

If this case favors Spokeo than the liability exposure for HR is significantly reduced. If the case favors Robins, the risks in FCRA lawsuits will go up considerably. This case and all FCRA cases shed light on ensuring your HR compliance processes are sound. Are you providing the required FCRA notices and getting consent forms for background checks? Are you using a background screening provider that is NAPBS accredited and provides you with the proper compliance tools?

Make the right choice when choosing a background check company. For more information regarding Intelifi’s services and technology, please contact (888) 409-1819 or visit www.intelifi.com.