Court Rules in Criminal Background Check Case that States are Immune from Lawsuits Under FCRA

Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

On October 11, 2018, a ruling in the case of Pendergrass v. Washington Metropolitan Area Transit Authority (WMATA) where the Plaintiff claimed WMATA’s criminal background check policy was discriminatory found that states are immune from lawsuits under the Fair Credit Reporting Act (FCRA).

Plaintiff Galen Pendergrass, an African-American male, applied for a job as a bus driver with WMATA in 2017. He received a job offer contingent upon the successful completion of a background check but was later notified that he was ineligible for the job because of a prior conviction for a non-violent offense.

The notice contained a description of the “individualized assessment” process to reevaluate the denial of employment. Pendergrass submitted a request for an individualized assessment to show why he should not be permanently excluded from employment with WMATA but he did not succeed in getting the job.

According to the ruling in the U.S. District Court, District of Columbia, WMATA adopted a revised criminal background check policy in February 2012 where WMATA would mail a letter to candidates with potentially disqualifying convictions to explain the results and tell them they had ten days to dispute the results.

Candidates could dispute the accuracy of the background check, but not ask for an exception to the policy. WMATA further revised the policy in July 2017 to let applicants request an individualized assessment of their convictions to determine if they should not be disqualified from a job based on the conviction.

In 2012, the U.S. Equal Employment Opportunity Commission (EEOC) – the federal agency enforcing laws prohibiting employment discrimination – approved ‘Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964’.

The EEOC enforces Title VII of the Civil Rights Act of 1964 which prohibits employment discrimination based on race, color, religion, sex, or national origin. The EEOC Enforcement Guidance is part of the EEOC’s efforts to eliminate unlawful discrimination in employment screening, hiring, or retention.

Pendergrass sued WMATA partly under the Title VII and the FCRA – a federal law regulating the use of information in background check reports – claiming that WMATA’s criminal background check policy had a “disparate impact” on African-American candidates due to their historically higher rate of criminal convictions.

Unlawful “disparate impact” is established if an employer uses a practice that causes an unfair impact on the basis of race, color, religion, sex, or national origin and the employer fails to demonstrate that the challenged practice is job related for the position in question and consistent with business necessity.

WMATA was created by an Interstate Compact among Washington, D.C., Virginia, and Maryland, and was approved by Congress to be the primary public transit agency for the D.C. metropolitan region. The Compact allows WMATA to “provide for the qualification, appointment, and removal of its employees.”

The FCRA claim was dismissed by the court since WMATA was created by a Congressionally-authorized Interstate Compact among Maryland, Virginia, and the District of Columbia (D.C.), and so Maryland, Virginia, and the District of Columbia conferred upon WMATA their respective sovereign immunities.

The claim that WMATA failed to comply with its criminal background check policy was dismissed, in part, because WMATA’s hiring policies are “governmental/discretionary decisions” that are immune from lawsuits and decisions concerning the hiring of WMATA employees are “immune from judicial review.”

Passed by Congress in 1970, the FCRA promotes the accuracy, fairness, and privacy of consumer information in background check reports, protects consumers from the willful or negligent inclusion of inaccurate information in those reports, and regulates the collection, dissemination, and use of consumer information.

ESR Offers Two White Papers on FCRA Lawsuits

Employment Screening Resources® (ESR) offers two complimentary white papers that examine the many causes that lead to FCRA lawsuits: “Common Ways Prospective or Current Employees Sue Employers Under the FCRA” and “Common Ways Consumer Reporting Agencies are Sued Under the FCRA.”

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