FCRA Guidlines

Here’s some good news for employers trying to follow the rules set forth by the Fair Credit Reporting Act (FCRA). A Pennsylvania court recently determined that while FCRA requires employers to send applicants a copy of their background checks (along with “A Summary of Your Rights Under the Fair Credit Reporting Act”) prior to taking “adverse action,” whether or not the applicant receives the information is immaterial.

This decision was rendered in the case of Wright v. Lincoln Property Company, filed January 27, 2017 in the United States District Court for the Eastern District of Pennsylvania. The suit arose after plaintiff Lemuel Wright agreed to undergo a background check, conducted by or on behalf of plaintiff Lincoln Property Company, in conjunction with his application for employment. Representatives of Lincoln sent Wright a copy of the background check along with the required summary of rights document. However, Wright alleged, he never received the documents. When Lincoln took adverse action, he argued, the firm had failed to comply with the law and thereby violated his rights under FRCA.

The Court ruled in favor of the defendant, noting that the FCRA statute does not require the entity intending to take adverse action to confirm the candidate’s receipt of the report and accompanying notice. (The statute merely states that the entity “shall provide” a copy of the materials.) The court further noted that Mr. Wright had not been able to show any case law that would have established precedent for such a requirement.

How about that? This is an interesting turn of events, and it definitely puts a mark in the “win” column for employers. Whether or not there will be subsequent efforts to strengthen the FCRA statute to require proof of receipt remains to be seen.