C.The FCRA Employee Authorization And Disclosure RequirementsMany FCRA cases focus on an employer’s failure to provide the required statutorynotices. Employers must provide adequate notice before running employee backgroundchecks. Employers must provide notice before taking an adverse action against anapplicant or employee, due to the results of a background. The plaintiff’s bar oftenseeks to pinpoint systemic flaws in employer notice practices.For example, in Lyttle, et al. v. Trulieve, Inc., Case No. 19-CV-2313 (M.D. Fla. Aug. 18,2022), the court approved a $60,500 settlement with individual class member paymentsof $280, resolving claims that Defendant violated the FCRA by failing to make properdisclosures and obtain proper authorizations. The Defendant in this case, Trulieve, is acannabis company. The plaintiffs alleged that he applied to work for Trulieve in 2019,and Trulieve ordered a consumer report. The complaint further alleged that Trulievefailed to disclose to the plaintiff that it would run a consumer report; it did certifycompliance with the FCRA to the credit reporting agency; it did not obtain authorizationfrom the plaintiff to run the report; and that it failed to give notice that it would rescindthe plaintiff’s employment offer after obtaining the consumer report.Lyttle demonstrates that an employer’s failure to certify its compliance with the FCRA toa third party credit reporting agency can be catastrophic from the perspective of classaction exposure. Whether an employer submitted these required certifications is simpleinquiry, and these individual violations can accumulate to form a sizeable class. Moreimportantly, Lyttle shows the importance making the required FCRA disclosures whencontemplating an adverse action against an applicant or employee. While state andlocal background check requirements may differ, the FCRA simply requires employersto provide applicants with notice that an adverse action based on a consumer report isbeing contemplated, provide the applicants with the consumer report and statement ofconsumer rights, and give applicants time to contest the contents of the consumerreport.D.Rulings On Standing In FCRA ActionsA common thread through FRCA cases is the fact that the plaintiffs in those casesadequately alleged that they had suffered a concrete harm, or “injury-in-fact,” as a resultof the defendants’ FCRA violations. Courts may dismiss complaints where the plaintifffails to allege that he or she suffered an “injury-in-fact” caused by the defendant’sviolations of the FCRA.For example, in Limon, et al. v. Circle K Stores Inc., 300 Cal. Rptr. 3d 572 (Cal. App. 5thDist. 2022), a California state appellate court upheld the trial court’s dismissal of theplaintiff’s FCRA claims because he had not alleged any injury-in-fact that would givehim standing to bring suit. The named plaintiff alleged that that the defendant in thiscase, Circle K, had violated the FCRA “standalone” provision by including requiredCalifornia background check disclosures and required FCRA disclosures on the samebackground check authorization form. Id. at 578-79. However, the plaintiff only allegedthat he “was confused regarding the nature of his rights under the FCRA…” Id. at 579.214© Duane Morris LLP 2023Duane Morris Class Action Review – 2023
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