Court Determines Plaintiff Lacks Standing over FCRA Allegations

In contrast to a recent court ruling, the U.S. Court of Appeals for the Eighth Circuit recently found a plaintiff lacked standing to bring suit over an employer’s allegedly deficient disclosure form and adverse action process required under the Fair Credit Reporting Act (FCRA).

The Background

As background for the case, the plaintiff alleged the employer contacted her to withdraw the conditional offer prior to receiving the pre-adverse action notice and copy of the report. At the top of the consumer report was a handwritten note—“offer rescinded—did not disclose felony.” The plaintiff further alleged the authorization form she signed was not clear and conspicuous due to the six-point font, did not use the term “consumer report,” and included extraneous information, such as a release of liability. 

The Court's Decision

Addressing the adverse action allegations, the court noted the job offer was rescinded prior to the plaintiff receiving or responding to the consumer report. However, despite this failure by the employer to first send the pre-adverse action notice before making an employment decision, the court determined the FCRA does not afford the right to consumers to discuss “accurate but negative information within the report” prior to the final decision. Because the information in the report relied upon by the employer in their decision was accurate, the court determined the plaintiff lacked standing to pursue this claim. 

Turning to the disclosure allegations, the court determined the plaintiff failed to allege any harm caused by the form’s contents and failed to establish she suffered a concrete injury. Thus, the court found she lacked standing to pursue this claim as well. 

The plaintiff also alleged the consumer report exceeded the scope of the authorization she provided as it stated an “independent investigation of [her] criminal records maintained by public and private organizations” would be conducted. Denying standing for this claim as well, the court determined that conducting a search of a sex offender registry is “not so unrelated to criminal history” that it falls outside the scope of authorization the plaintiff provided. 

Key Takeaway

Employers should review this case—along with their adverse action process and disclosure form—with their legal counsel especially as there are contrasting court opinions on these issues.