Employers Should Watch Out for Phony Job Seekers Looking for FCRA Lawsuits Not Work

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Written By ESR News Blog Editor Thomas Ahearn

Employers conducting background checks on prospective employees have to worry about the sharp rise in the number of class action lawsuits filed by job applicants over alleged technical violations of the federal Fair Credit Reporting Act (FCRA). Employment Screening Resources (ESR) saw the potential for phony job seekers looking to file FCRA class action lawsuits over technical violations of the FCRA as far back as a March 25, 2009 blog “Cup of Coffee with that Criminal Conviction? Starbucks Case Underscores Importance of Well-Crafted Employment Application” written by ESR founder and CEO Attorney Lester Rosen.

In the blog, Rosen writes: The Court discussed how allowing these kinds of suits by plaintiffs that were not actually harmed would potentially create a whole new category of employment-professional job seekers, whose quest is to voluntarily find (and fill out) job applications which they know to be defective solely for the purpose of pursing litigation.

ESR News has closely followed the rise of FCRA class action lawsuits in 2015. In this year alone, companies such as Food Lion, Home Depot, Chuck E. Cheese, BMW, and Whole Foods have paid settlements in FCRA lawsuits ranging from $803,000 to $3 million. By far the most common claim made in this wave of FCRA class action lawsuits is that the defendant employer violated §1681b(b)(2)(A)(i) of the FCRA which requires that “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.”

As reported in the ESR News blog “Supreme Court Hears Oral Arguments in Spokeo v. Robins,” the question as to whether or not a plaintiff has the legal right to bring a class action lawsuit for a technical violation of the FCRA if that individual suffered no actual concrete harm from the violation was argued in the Supreme Court of the United States on November 2, 2015, in the case of Spokeo, Inc. v. Robins. The case involves a Virginia man named Thomas Robins who filed a class action lawsuit against Spokeo – an online “people search engine” selling publicly available information about individuals – alleging that the company violated the FCRA by publishing inaccurate information about his age, education, marital status, and professional experience.

According to analysis of the arguments on the SCOTUS blog, a ruling that plaintiffs only have to allege a violation of a right created by a statute without needing to show concrete real world harm from the violation “did not seem likely” and that plaintiffs “need to be able to point to actual harm from a violation of a statute, rather than just the violation of the statute itself.” However, Justice Elena Kagan focused on whether Robins was actually injured when Spokeo published false information about him. According to the analysis: This would allow Robins’s lawsuit to go forward, without forcing the Court to choose between opening the federal courts to frivolous but possibly massive class-action lawsuits (Spokeo’s prediction if Robins were to prevail) and closing the courthouse doors to potentially important privacy, civil rights, environmental, and patent lawsuits (Robins’s prediction if Spokeo were to prevail).

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