Duane Morris Class Action Review - 2023 - Report - Page 215
C.
The FCRA Employee Authorization And Disclosure Requirements
Many FCRA cases focus on an employer’s failure to provide the required statutory
notices. Employers must provide adequate notice before running employee background
checks. Employers must provide notice before taking an adverse action against an
applicant or employee, due to the results of a background. The plaintiff’s bar often
seeks 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 payments
of $280, resolving claims that Defendant violated the FCRA by failing to make proper
disclosures and obtain proper authorizations. The Defendant in this case, Trulieve, is a
cannabis company. The plaintiffs alleged that he applied to work for Trulieve in 2019,
and Trulieve ordered a consumer report. The complaint further alleged that Trulieve
failed to disclose to the plaintiff that it would run a consumer report; it did certify
compliance with the FCRA to the credit reporting agency; it did not obtain authorization
from the plaintiff to run the report; and that it failed to give notice that it would rescind
the plaintiff’s employment offer after obtaining the consumer report.
Lyttle demonstrates that an employer’s failure to certify its compliance with the FCRA to
a third party credit reporting agency can be catastrophic from the perspective of class
action exposure. Whether an employer submitted these required certifications is simple
inquiry, and these individual violations can accumulate to form a sizeable class. More
importantly, Lyttle shows the importance making the required FCRA disclosures when
contemplating an adverse action against an applicant or employee. While state and
local background check requirements may differ, the FCRA simply requires employers
to provide applicants with notice that an adverse action based on a consumer report is
being contemplated, provide the applicants with the consumer report and statement of
consumer rights, and give applicants time to contest the contents of the consumer
report.
D.
Rulings On Standing In FCRA Actions
A common thread through FRCA cases is the fact that the plaintiffs in those cases
adequately alleged that they had suffered a concrete harm, or “injury-in-fact,” as a result
of the defendants’ FCRA violations. Courts may dismiss complaints where the plaintiff
fails to allege that he or she suffered an “injury-in-fact” caused by the defendant’s
violations of the FCRA.
For example, in Limon, et al. v. Circle K Stores Inc., 300 Cal. Rptr. 3d 572 (Cal. App. 5th
Dist. 2022), a California state appellate court upheld the trial court’s dismissal of the
plaintiff’s FCRA claims because he had not alleged any injury-in-fact that would give
him standing to bring suit. The named plaintiff alleged that that the defendant in this
case, Circle K, had violated the FCRA “standalone” provision by including required
California background check disclosures and required FCRA disclosures on the same
background check authorization form. Id. at 578-79. However, the plaintiff only alleged
that he “was confused regarding the nature of his rights under the FCRA…” Id. at 579.
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Duane Morris Class Action Review – 2023
