Federal Court Finds FCRA Does Not Provide Job Applicants a Right to Explain Accurate Information on Background Checks

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Background Checks

The Court of Appeals for the Eighth Circuit issued a ruling earlier this month that found that employers may not be required to give candidates the chance to explain criminal convictions before rescinding a conditional offer of employment. In its ruling, a panel of three Eighth Circuit judges found that though the Fair Credit Reporting Act (FCRA) gives candidates the right to dispute the accuracy of a background check, it does not give them the right to discuss accurately reported information before an offer of employment is rescinded.

This case began when the plaintiff alleged that a data processing firm violated the FCRA by failing to provide her with a copy of her background check report and an opportunity to discuss the conviction before withdrawing its conditional offer of employment. The plaintiff had previously been convicted of armed robbery and murder, for which she served 12 years in prison; however, on her application for the position, she responded that she had never been convicted of a felony and included a handwritten note stating that she was once arrested at age 17 and subsequently found not guilty.

The plaintiff was given a job offer contingent on the results of a background check to which she agreed. However, after reviewing the report, the company rescinded the job and said that a letter of confirmation would follow. The plaintiff alleges that she was not given the opportunity to correct or explain any information in the report prior to the offer being rescinded. Two weeks later, the letter arrived and contained the background check report and a copy of her rights under the FCRA. The background check report uncovered the employee’s felony convictions for murder and armed robbery and at the top of the report included a handwritten note stating, “offer rescinded – did not disclose felony.”

The plaintiff filed a lawsuit alleging, among other claims, that the employer violated the FCRA by taking adverse employment-related action based on her issued report prior to providing her with a copy of the report. The trial court denied the employer’s motions to dismiss the claims; however, on appeal, the 8th Circuit reversed this decision.

The Eighth Circuit found in its analysis that the plaintiff does not dispute the accuracy of the information. Instead, it is only premised on the right to contextualize and explain negative information in her report. According to the panel, “neither the text of the FCRA nor the legislative history provide support for (the plaintiff’s) claim that she has a right under the FCRA to not only receive a copy of her consumer report but also discuss directly with the employer accurate but negative information within the report prior to the employer taking adverse action.” Though the failure to provide a copy of the report was a technical violation of the FCRA, it did not create concrete harm enough to confer Article III standing.

Though this ruling is beneficial for employers, it is important to adhere to the FCRA requirements and best practices when completing background checks. First of all, this case hinged on the fact that the background check was accurate; however, it is important not to assume that this is the case. Accidents can happen, and not all background check providers may provide the same level of quality.

Further, it is crucial to always provide suitable notice and a copy of the report in compliance with the FCRA. The Eighth Circuit found in this case that a bare procedural violation is not enough to confer standing, but other circuits and state laws have provided different results. It is always important to have suitable policies and procedures in place to ensure compliance.

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