Litigation Continues Plaguing Employers

Employers continue to face a tidal wave of litigation pertaining to the Fair Credit Reporting Act (FCRA). The positive news? These cases are all still focused on the two primary requirements employers have under the FCRA: the disclosure form and adverse action process.

A recent decision from the U.S. District Court for the Northern District of California now has an employer facing a certified class action over its disclosure form.[1] As noted in the court opinion, the employer provided a one-page form that contained a disclosure and authorization along with information specific to several state requirements. Not surprisingly, the plaintiffs alleged in the original complaint that the inclusion of state law provisions on the disclosure form violated the “solely” requirement of the FCRA and led to confusion as a result of the extraneous information.

In reviewing the matter at hand, the court determined the claim could proceed as a certified class action. However, the court decided that one of the two named plaintiffs was time-barred from bringing the claim based on the FCRA’s two-year statute of limitations. The plaintiff received a copy of his consumer report on October 28, 2015 and therefore should have brought a claim by November 1, 2017. Since the complaint was not filed until April 2018, the court determined his claim was untimely. The other named plaintiff was allowed to proceed as the class representative.

This is not the first time an employer has faced potential damages based on the inclusion of state law notices on the disclosure form. Asurint recommends employers have their forms and processes reviewed by qualified legal counsel on at least an annual basis if not more frequently.
[1] Bebault v. DMG Mori USA, Inc., No. 18-cv-02373-JD (N.D. Cal. Apr. 29, 2020).