Written By ESR News Blog Editor Thomas Ahearn
In December of 2017, a federal Judge in Pennsylvania dismissed a class action lawsuit against Rite Aid Corporation claiming violations of the federal Fair Credit Reporting Act (FCRA) that regulates background checks for employment purposes for lack of standing under Article III of the United States Constitution.
In the opinion in Moore v. Rite Aid Headquarters Corp., Judge Jan DuBois of the U.S. District Court for the Eastern District of Pennsylvania found plaintiff Kyra Moore could not show she suffered an injury after Rite Aid allegedly did not properly provide her with an FCRA mandated notice before declining her employment.
Moore applied for a job at Rite Aid and was found to be “ineligible for hire” based on her background check that caused a pre-adverse action letter to be sent to Moore informing her that she would not be offered employment if Rite Aid did not hear from her within five business days after receiving the letter.
Moore contacted Rite Aid to discuss her background check after receiving the pre-adverse action letter, but was mailed an FCRA mandated adverse action letter by Rite Aid exactly five business days after the date of the pre-adverse action letter informing her that she would not be hired for a job at Rite Aid.
Moore claimed Rite Aid violated the pre-adverse action provision of the FCRA by taking adverse action against her without waiting the “full five day period” set forth in the pre-adverse action letter but the court dismissed her claim after finding she had not suffered an injury based on Rite Aid’s conduct.
The court concluded Moore had “not suffered a concrete harm to her procedural rights under the FCRA” and dismissed her claim for lack of standing, finding that a defendant should not be held liable in federal court for a technical violation of the FCRA where the plaintiff experienced no actual injury as a result.
On May 16, 2016, the U.S. Supreme Court ruled in Spokeo, Inc. v. Robins, Inc. that plaintiffs must prove “concrete injury” in class action lawsuits for alleged “bare” violations of a federal statute such as the FCRA, but employers are still being targeted by FCRA lawsuits even after the Spokeo ruling.
The case of Spokeo, Inc. v. Robins, Inc. involved a man named Thomas Robins who filed a class action lawsuit against Spokeo – an online “people search engine” that sells publicly available data about individuals – claiming that Spokeo violated the FCRA by publishing inaccurate information about him.
The U.S. Supreme Court stated in its opinion: “Article III standing requires a concrete injury even in the context of a statutory violation. For that reason, Robins could not, for example, allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.”
The fact that FCRA class action lawsuits will continue to target employers performing background checks is one of the “ESR Top Ten Background Check Trends” for 2018 selected by leading global background check firm Employment Screening Resources (ESR). The complete list of trends is available here.
ESR Whitepapers on FCRA Lawsuits
ESR offers two complimentary whitepapers – “Common Ways Prospective or Current Employees Sue Employers Under the FCRA” and “Common Ways Consumer Reporting Agencies are Sued Under the FCRA” – to help employers better understand the many causes behind FCRA class action lawsuits.
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