Pre-Employ Blog

FCRA Class Action Case Dismissed

Posted by Bob Mather on March 23, 2017

A win for employers, Fair Credit Reporting Act (FCRA) class action lawsuit case dismissed.

A federal judge in Minnesota dismissed a FCRA class action lawsuit after agreeing with the defendants that her “informational injury” did not meet the burden of proof. Employers that are currently in litigation regarding background check release forms should take note. If your company is not in litigation, this information should be shared with your legal department.

Group of people giving high fivesDavid Gettings of the law firm Troutman Sanders summarized this ruling below:

“Ever since the Supreme Court decided Spokeo, Inc. v. Robins last year, courts have been struggling to define the contours of standing in “no injury” class actions. In Fields v. Beverly Health and Rehabilitation Services, Inc. et al., the District of Minnesota recently granted a motion to dismiss a Fair Credit Reporting Act claim in which a plaintiff alleged that the defendants failed to provide a compliant background check disclosure. In doing so, the District Court found that receipt of a disclosure that includes the proper content, but is laid out in an improper form, is not enough to confer standing. 

In Fields, the defendants operated a number of nursing homes and assisted living facilities.  Plaintiff Maxine Fields applied to work for the defendants and filled out a background check authorization form in the process.  The defendants subsequently obtained a background check on Fields, who ended up working for the defendants for fourteen months. 

Ultimately, Fields sued the defendants under the FCRA.  In her lawsuit, she claimed that their background check authorization document violated the FCRA because, among other things, it did not constitute a document consisting solely of the disclosure that a background check would be obtained.  The defendants moved to dismiss the complaint.  In their motion, they argued that simply receiving a background check disclosure that included the proper content, but that was not in the proper form, was not a concrete injury that was sufficient to confer Constitutional standing. 

The Court agreed with the defendants and rejected Fields’ argument that she had suffered an “informational injury” sufficient to confer standing.  According to the Court, the FCRA’s background check disclosure provision gives consumers a right to receive the statutorily-required disclosure in a non-confusing manner.  It does not give consumers a right, however, to simply sue upon receipt of a non-confusing disclosure that was simply presented in an improper form.   

With this construct in mind, the Court found that Fields had not suffered an injury sufficient to confer standing.  According to the Court, “Plaintiff cannot demonstrate a concrete injury merely by alleging that the form of the disclosure violates the FCRA.”  In the Court’s view, “[b]ecause Plaintiff does not allege that she was confused or was deprived of statutorily required information, Plaintiff fails to demonstrate that she suffered a concrete informational injury based on the form of the disclosure.

Recently, FCRA lawsuits have skyrocketed 47%. If you're interested in staying compliant with FCRA regulations to avoid FCRA class action lawsuits, contact us to learn more about what Pre-employ can do for you.

Did you know that Pre-employ has been named the #1 background check company in the nation? See why we're a trusted background check service provider to Fortune 1000 employers across the nation for over 20 years.

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Topics: FCRA, class action lawsuit, Lawsuits, FCRA Compliance

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