The Fair Credit Reporting Act (“FCRA”)

So many employers during the hiring and onboarding process unknowingly or intentionally violate adverse action law by failing to hire someone without abiding by the Fair Credit Reporting Act (the “FCRA”). Section 1681b(b)(2)(A) (the “disclosure requirement”) of the FCRA provides that a person or entity may not procure a consumer report for employment purposes unless:

• A clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured… in a document that consists solely of the disclosure that a consumer report may be obtained for employment purposes; and
• The consumer has authorized in writing… the procurement of the report by that person.

Remarkably, employers often avoid these legal obligations. In addition, Section 1681b(b)(3)(A) (hereinafter, the “pre-adverse action requirement”) of the FCRA states:

• In using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending to take such adverse action shall provide to the consumer to whom the report relates (i) a copy of the report; and (ii) a description in writing of the rights of the consumer [to obtain and dispute information in the report]. Tonge v. Fundamental Labor Strategies, Inc., 277 F.Supp.3d 809, 812-813 (2017).

The clear purpose of the pre-adverse action requirement is to ensure that applicants and employees have the opportunity to “discuss reports with employers or otherwise respond before adverse action is taken” against them. Id., citing Goode v. LexisNexis Risk & Info. Analytics Grp., 848 F.Supp.2d 532, 537 (E.D. Pa. 2012). Our law firm has seen many instances where the employer denies applications this opportunity. Rather, employers take adverse action against employees without furnishing a copy of the report or a description of their rights. Critically, an “adverse action” includes denying an employment application. § 1681a(k)(1)(B)(ii). Failing to provide notice of pre-adverse actions rights is the “very injury that FCRA is intended to prevent.” Tonge, 277 F.Supp.3d 809 at 821 (2017).

In addition, an employer’s adverse action against an applicant can also violate Title VII of the Civil Rights Act of 1964, 42 U.S.C §2000e, et seq. In Griggs v. Duke Power Co., the Supreme Court construed Title VII to prohibit “not only overt discrimination but also practices that are fair in form, but discriminatory in operation” – that is, practices that have a “disparate impact.” 401 U.S. 424, 431, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971). Under Title VII, employers cannot blanketly discriminate against potential employees with felonies. Green v. Missouri Pac. R. Co., 549 F.2d 1158 (8th Cir. 1977). Where an applicant possesses the requisite qualifications for the job, there is a rebuttable inference that the employer refused to hire the applicant solely due to criminal acts that are often in the applicant’s distant past.

Our Experienced Employment Law Attorneys Can Help

If you have been denied employment based on an employer conducting a background check, please contact us today. Call 844-HURWITZ or email us to discuss your options. We can help!