Seventh Circuit: Fair Credit Reporting Act Pre-Adverse Action Requirements Are Actionable

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August 29, 2018

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Contrary to the Ninth Circuit’s recently ruling, the Seventh Circuit Court of Appeal stated that an employer’s failure to provide a copy of an applicant’s background check report and notice of rights under the Fair Credit Reporting Act (FCRA) gives an applicant standing to sue the employer, because it amounts to an allegation of being deprived a chance to benefit. Employers are required to provide the report and notice to applicants under the FCRA so that they may have the opportunity to contest the accuracy or completeness of the information.

In Robertson v. Allied Solutions, LLC, an applicant was told that an offer of employment was rescinded by an employer on the basis of information contained within a background screen. Moreover, the applicant did not receive a copy of the background check report or a notice of her rights under the FCRA before the offer was rescinded. Although there were no allegations that the information relied upon by the employer was inaccurate when it rescinded the offer, the Seventh Circuit stated that, because the applicant did not receive the information required by law, she was subject to an informational injury that deprived her of the ability to put the background information into context so that the employer may have revisited its position.

Action Items

  1. Implement procedures consistent with adverse action requirements under the FCRA.
  2. Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser.

© 2018 ManagEase

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