Background Checks

A lawsuit now with the Supreme Court of the United States (SCOTUS) has potential implications for a range of federal statutes, including the Fair Credit Reporting Act (FCRA) and other hiring-related laws. On November 2, 2015, (SCOTUS) heard oral arguments in the case of Spokeo, Inc. v. Robins, in which Virginia resident Thomas Robins alleges that “people search engine” Spokeo violated the FCRA by publishing inaccurate information about his age, education, marital status and professional experience.

The FCRA requires organizations, from consumer reporting agencies (CRAs) to the hiring firms that use them, to ensure consumer protections that meet a variety of requirements including accuracy. As a company that sells the results from its searchable information database, Spokeo meets the definition of a CRA outlined in 15 U.S. Code § 1681a.

Under the FCRA, consumers may claim damages from $100 to $1000 if a company publishes inaccurate information about them. Spokeo could pay millions to consumers with inaccurate published information if the Supreme Court upholds the U.S. Court of Appeals for the Ninth Circuit ruling, which determined Robins had Article III standing to sue under the FCRA.

Article III of the U.S. Constitution is invoked to determine if individuals have “standing” to pursue a class-action suit when they allege their rights have been violated. At issue in this decision is whether a plaintiff who suffers no concrete harm, but who instead alleges only a statutory violation, has standing to bring a claim on behalf of himself or a class of individuals.

The Supreme Court’s determination may have a significant impact on consumers, employers (as well as employees and prospective employees) and the consumer reporting industry as a whole, so Barada will monitor its progress and report back to our readers. In an upcoming blog, we’ll also explain a bit more about why FCRA presents such landmine for employers.