An internet news search containing the keywords “FCRA Settlement 2016” returns over 1,800 results in less than a second. Just a few weeks from Valentine’s Day, it’s clear that plaintiffs’ love letters to the 45-year-old federal law are still being answered at an alarming rate. The FCRA governs an employer’s use of so-called “consumer reports” (e.g., criminal background checks, credit reports, etc.) for employment purposes. Essentially, the FCRA sets out a list of steps that employers must follow if they wish to take an “adverse action” against an applicant or employee based on information contained in the consumer report.
Yet a simple question remains: “Why?” Why do plaintiffs’ attorneys so regularly file monetarily successful claims – especially class action claims – against employers under the FCRA? Three features of the FCRA answer that question and can guide employers seeking to minimize the risk of an FCRA violation.
1. The FCRA is Confusing
And not just to laypeople! – the United States Supreme Court has poetically criticized the FCRA as “less-than-pellucid.” Plaintiffs’ attorneys have exploited this uncertainty to great effect.
2. Classes are Frequently Certified
The most common FCRA class action lawsuits allege some kind of technical deficiency in the employer’s “Disclosure and Authorization” form. Because many employers use boilerplate language in forms distributed to all applicants, Plaintiffs argue that a procedural violation is more likely to affect an entire group of employees or job applicants in a uniform way than in other employment contexts, which depend more on individualized facts and circumstances. An employer’s dutiful consistency can be a hindrance if an unlawful Disclosure and Authorization form is utilized.
3. Costs and Fees are a Breeze
FCRA violations are broken down into two camps – “willful noncompliance” and “negligent noncompliance.” Though plaintiffs must meet the stricter “willful” standard if they want to pursue statutory and punitive damages, simple negligence will work for an award of actual damages, costs, and attorney’s fees. This relatively low bar gives plaintiffs’ attorneys a financial incentive to doggedly pursue even the most seemingly minor violations.
Though “certainty” and “the FCRA” can seem fundamentally incompatible, gaining an understanding of plaintiffs’ motivations can be the first step in preventing them from making an employer another costly statistic in a Google search.