State Laws on Screening and Federal Preemption – Where Are We Now and Where Are We Heading?

by David M. Gettings, Kim Phan, Cindy D. Hanson, Timothy J. St. George - Troutman Pepper

FCRA Focus Podcast

Please join Troutman Pepper Partner Dave Gettings and colleagues Tim St. George and Cindy Hanson for a highly informative discussion on federal preemption as it relates to state laws and the Fair Credit Reporting Act (FCRA). This episode provides listeners with an overview of important state and local legislation governing background screening, along with discussions about how federal preemption might affect required compliance with these state and local laws.

Read more: https://www.troutman.com/insights/state-laws-on-screening-and-federal-preemption-where-are-we-now-and-where-are-we-heading.html

Looking for Skeletons in the Closet? Avoid These Background Check Mistakes

by Jake Proudfoot, Akerman LLP - JDSupra

A scary surprise is fun to encounter when you are in a haunted house at a Halloween event, but not so much fun when you are performing a background check on a potential employee. Even worse is finding out after the fact that you failed to comply with one of the many legal requirements, and that your company is now suddenly facing a fine or lawsuit. This Halloween, make background checks and hiring much less spooky by avoiding these common mistakes.

Read more: https://www.jdsupra.com/legalnews/looking-for-skeletons-in-the-closet-6454570/

CFPB Extends Deadline for FCRA Rulemaking Feedback by One Week

by David Anthony, David Gettings, Ethan Ostroff, Kim Phan, Ronald Raether, Chris Willis, Troutman Pepper - JD Supra

As discussed here, on September 21 the Consumer Financial Protection Bureau (CFPB) released an outline of its plans for rulemaking under the Fair Credit Reporting Act (FCRA). The outline was supplied for initial comment to a panel of small business representatives convened under the Small Business Regulatory Enforcement Fairness Act (SBREFA).

Read more: https://www.jdsupra.com/legalnews/cfpb-extends-deadline-for-fcra-7003211/

FTC Settles FCRA Suit Against “People-Search” Companies

by Sheppard Mullin Richter & Hampton LLP - JD Supra

On September 11, the FTC announced that it had reached a settlement with two “people-search” companies which would resolve charges that the companies had engaged in practices that violated the Fair Credit Reporting Act (“FCRA”). The California-based defendants market “people-search” services, allowing users to search unlimited background reports on individuals, and charge monthly subscription fees to view the full reports. Searches can be run using an individual’s name and/or city and state of residence.

Read more: https://www.jdsupra.com/legalnews/ftc-settles-fcra-suit-against-people-5069104/

U.S. Supreme Court Focuses on Subjective Intent in Overturning False Claim Act Cases

by Duane Morris

Writing for a unanimous Supreme Court of the United States, on June 1, 2023, Justice Clarence Thomas issued a decision clarifying the knowledge requirement for cases brought pursuant to the False Claims Act (FCA). In overturning the consolidated cases of United States ex rel. Schutte et al. v. SuperValu Inc., et al. and United States ex rel. Proctor v. Safeway, Inc., the Supreme Court rejected the Seventh Circuit’s focus on the objectively reasonable interpretation of an ambiguous rule or regulation. Instead, the Court held that the FCA’s scienter requirement refers to the defendant’s subjective knowledge and belief at the time the claim is submitted.

Read more: https://www.duanemorris.com/alerts/us_supreme_court_focuses_subjective_intent_overturning_false_claims_act_cases_0623.html

No FCRA Violations Found Where Defendants Promptly Corrected Inaccurate Data and Updated Plaintiffs’ Consumer Report

by Rachel Ommerman, Virginia Bell Flynn, David N. Anthony - Consumer Financial Services Law Monitor

In a recent decision, the U.S. District Court for the Eastern District of Pennsylvania granted summary judgment in a Fair Credit Reporting Act (FCRA) case where a bank promptly corrected inaccurate mortgage payment information furnished to three national consumer reporting agencies (CRAs).

Read more: https://www.consumerfinancialserviceslawmonitor.com/2023/04/no-fcra-violations-found-where-defendants-promptly-corrected-inaccurate-data-and-updated-plaintiffs-consumer-report/#page=1

How one little background check mistake landed this employer in court

by Tom D’Agostino - HR Morning

Do you conduct background checks on job applicants? If the answer is yes, this is an important case to know.

A state appeals court in California has revived a putative class action suit that accuses an employer of willfully violating the federal Fair Credit and Reporting Act (FCRA) by providing job applicants with an improper disclosure relating to its acquisition and use of consumer reports.

Read more: https://www.hrmorning.com/news/background-checks/

Federal Appeals Court Sides with Employer in Job Applicant’s Background Check Suit: 3 Steps to Avoid Similar Claims

by Richard Millisor, Fisher Phillips - JD Supra

A job applicant who didn’t disclose a felony conviction can’t sue her prospective employer under a federal background-check law for failing to provide proper notice before rescinding her offer, according to a recent decision from a federal appeals court. The job applicant didn’t claim the background report was wrong. Instead, she argued that she should have been given a chance to explain the conviction before the offer was withdrawn. In Schumacher v. SC Data Center, Inc., the 8th U.S. Circuit Court of Appeals ruled in favor of the employer even though it technically violated the Fair Credit Reporting Act (FCRA). The act doesn’t give applicants the right to explain negative but accurate information in a consumer report before the employer can make an adverse employment decision, the court said in a May 3 decision. Although the ruling is good news for employers, you should take the following three steps to comply with FCRA’s notice requirements and avoid similar claims.

Read more: https://www.jdsupra.com/legalnews/federal-appeals-court-sides-with-1410611/

Credit reporting law doesn't give job seekers a right to explain criminal history, 8th Circuit says

by Debra Cassens Weiss - ABA Journal

A job applicant turned down for a job because she didn’t disclose her criminal history can’t sue the employer in federal court for a violation of the Fair Credit Reporting Act, a federal appeals court ruled on Tuesday.

The St. Louis-based 8th U.S. Circuit Court of Appeals said the rejected applicant, Ria Schumacher, did not have standing to pursue her case because the FCRA does not require employers to give job applicants a chance to explain the information uncovered in their consumer reports.

Read more: https://www.abajournal.com/web/article/credit-reporting-law-doesnt-give-job-seekers-a-right-to-explain-criminal-history-8th-circuit-says

Recent Holdings Contain New Defenses to Class Actions

by Robert T. Quackenboss, Lukas Moffett - The National Law Review

Of the many class action-related decisions from the last year, two courts issued holdings that are particularly relevant to defending against class action lawsuits (particularly in the context of the Fair Credit Reporting Act (FCRA)).

Davis v. Universal Prot. Services, LLC, No. 20-CV-01758, United States District Court for the Eastern District of Pennsylvania:

In Davis, the plaintiff (and putative class) alleged that the defendant violated the FCRA by (1) procuring a criminal background check on her; (2) relying on the contents of the criminal background check; and (3) failing to provide her FCRA-compliant notice prior to determining that she was ineligible for employment. The plaintiff alleged that the defendant’s failure to provide FCRA-compliant notice caused her harm by preventing her from challenging and/or having a meaningful discussion about the contents of her criminal background check report.

Read more: https://www.natlawreview.com/article/recent-holdings-contain-new-defenses-to-class-actions