September 18, 2024
The Sixth Circuit Court recently announced its ruling concerning an individual who did not receive an appropriate pre-adverse action notice under the Fair Credit Reporting Act (FCRA). According to this ruling, failure to provide suitable notices does not constitute a concrete injury to meet standing requirements.
In this FCRA case, the plaintiff had previously applied for employment at one of the largest retail chains in the United States. After an interview, the plaintiff claimed that the company reassured him that nothing would prevent them from hiring him. The interviewer then informed him of the company’s mandatory background-checking policy. As such, the plaintiff received a job offer contingent on the background check results.
He then received a disclosure form asking for permission to screen his background and another form inquiring about previous convictions. The plaintiff agreed to the background check and confirmed he had no convictions on record. The defending employer requested a background check, and the vendor found that the applicant had a misdemeanor conviction on his record from 15 years prior.
The vendor provided the employer with a report indicating they found criminal record information that the plaintiff did not disclose. They also sent the applicant a copy of his rights under the FCRA. The report included a statement concerning the county records section. Here, it explained that the discovered information could adversely impact his ability to acquire employment and label him “Not Competitive.”
However, the report did not mention his failure to disclose the conviction before the investigation led to this statement. The plaintiff claimed he called the vendor and employer but did not receive a satisfactory answer about these reports. Following this result, the company rescinded his offer of employment.
The rescinded offer led to the applicant filing a lawsuit against the employer. He claimed they violated the FCRA by taking adverse action without providing a full copy of their consumer report. However, the district court rejected these arguments.
The court found that violating the FCRA’s pre-adverse action notice requirements alone does not result in concrete harm. It further explained that such harm would happen if the report proved inaccurate or the statutory violation counted as a “but-for” cause of the adverse action. Because the court found neither applied in this case, it determined that the plaintiff lacked standing under Article III.
The Sixth Circuit also affirmed this ruling when brought to their attention. This court confirmed that the lower court correctly found that the plaintiff lacked Article III standing to sue. As such, this ruling continued to uphold how statutory violations of the FCRA do not inherently create a concrete injury for Article III standing.
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Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.