Staffing Management

An Injury Without an Injury? SCOTUS, Standing, and the Fair Credit Reporting Act

By Jon Hyman

Nov. 3, 2015

The Supreme Court on Nov. 2 heard oral argument in Spokeo, Inc. v. Robins. This case should answer a very important question for employers: Does a plaintiff have standing to bring a lawsuit for a technical violation of the Fair Credit Reporting Act if the individual suffered no resulting concrete harm? The implications of this case are huge.

Over the past few years, the number of FCRA class-action lawsuits has increased exponentially. It’s easy to see why. The FCRA is a highly technical statute. It does not regulate how employers use background checks on applicants or employees, but instead regulates the hoops through which an employer must jump to use legally obtain these background checks. These hoops are:

  1. Notice to the applicant or employee of the intent to obtain the background check.
  2. Consent by the applicant or employee.
  3. Certification to the consumer reporting agency of the notice and consent.
  4. Pre-adverse action disclosure to the applicant or employee before taking an action based on the content of the report obtained.
  5. Wait a reasonable amount of time.
  6. Adverse-action disclosure.

If an employer slips on any step, it has violated the statute. Yet, missing one of these technical steps usually does not make an applicant any more hireable. Just because an employer buries the notice and consent in an employment application (illegal / violates the FCRA) does not mean that an applicant with a felonious criminal history should be hired.

This is where Spokeo enters the picture. The case will decide whether a plaintiff can suffer a violation of a statutory right without corresponding actual damages. If SCOTUS answers “yes”, it will mean that job applicants and employees will have a green light to file lawsuits even if they can’t show that the violation of the law cost them money. Cynically, a “yes” would give litigants carte blanche to turn innocuous and harmless conduct into expensive class action lawsuits.

Keep an eye out for the decision in this case in 2016. It will help define the degree of concern employers will need to show towards FCRA class actions moving forward.

For now, you can read the oral argument transcript [pdf] to see how divided across ideological issues the justices appear to be over this issue.

Jon Hyman is a partner in the Employment & Labor practice at Wickens Herzer Panza. Contact Hyman at JHyman@Wickenslaw.com.

About Workforce.com

blog workforce

We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.

Book a call
See the software

Related Articles

workforce blog

HR Administration

Rest and lunch break laws in every US state

Summary Federal law does not require meal or rest breaks Some states have laws requiring meal and rest ...

workforce blog

Staffing Management

What is labor forecasting?

Summary Labor forecasting helps businesses determine where, when, what kind, and how many employees are...

demand forecasting, labor forecasting, labor modeling, staffing

workforce blog

Staffing Management

How staffing agencies can better manage a remote workforce

Summary As remote work continues its rise, modern workforce management technology is being adopted – st...

remote employees, scheduling, staffing, time and attendance management