Written By ESR News Blog Editor Thomas Ahearn
On March 4, 2022, the U.S. District Court in the Middle District of North Carolina denied Defendant’s Motion to Dismiss a lawsuit filed over alleged violations of the Fair Credit Reporting Act (FCRA) and found a Plaintiff had Article III standing by following the Supreme Court of the United States ruling in TransUnion LLC v. Ramirez.
The lawsuit arose after Plaintiff applied for a job with Defendant in March 2019. Defendant later determined that Plaintiff was ineligible for employment based on information contained in a “consumer report” about Plaintiff provided to Defendant by a “consumer reporting agency” (CRA) that conducted background checks.
The FCRA requires employers to provide consumers with a “pre-adverse action” letter before taking an “adverse action” based on information in a consumer report. However, the pre-adverse action letter the CRA sent Plaintiff did not include a copy of the consumer report in alleged violation of FCRA Section 1681b(b)(3).
Plaintiff claimed that, because he did not receive a copy of his consumer report, he was not aware it inaccurately stated that he had been found guilty of six felonies and misdemeanors. Plaintiff only became aware of the error after the position he had applied for had been filled by another person.
Plaintiff sued Defendant and claimed Defendant violated the FCRA by failing to provide him a copy of his consumer report prior to taking adverse action, and that he suffered harm as a result of the violation such as the loss of a job opportunity and damages in the form of wage loss and emotional distress.
The Court did find that Defendant failed to provide Plaintiff with a copy of his consumer report as required under the FCRA and, since he never received a copy, Plaintiff had no reason to know about the inaccurate information in his consumer report, hindering his ability to correct the report.
The District Court found that Defendant’s failure to provide a copy of the report ultimately prevented Plaintiff from being hired by Defendant. In denying Defendant’s Motion to Disimss, the court held that Plaintiff had sufficiently alleged that he suffered an injury in fact that was concrete and so had Article III standing.
On June 25, 2021, the Supreme Court ruled in TransUnion LLC v. Ramirez that a plaintiff must suffer a “concrete harm” resulting from a defendant’s statutory violation of federal law such as the FCRA to have sufficient standing to sue under Article III of the United States Constitution.
“To have Article III standing to sue in federal court, plaintiffs must demonstrate, among other things, that they suffered a concrete harm. No concrete harm, no standing,” Justice Brett M. Kavanaugh wrote in the majority opinion that reversed and remanded the case in a narrow 5 to 4 vote.
Enacted in 1970, the FCRA promotes the accuracy, fairness, and privacy of consumer information contained in the files of CRAs and protects consumers from the willful and negligent inclusion of inaccurate information in their credit reports. The FCRA also regulates the collection, dissemination, and use of consumer information.
Employment Screening Resources (ESR) – a service offering of ClearStar, a leading provider of Human Capital Integrity℠ technology-based services, specializing in background, credit, and medical screening – offers background screening solutions that help employers comply with the FCRA. To learn more, contact ESR today.
NOTE: Employment Screening Resources (ESR) – a service offering of ClearStar – does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.
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