Labor and Employment Law
For employers, background checks, credit checks, and similar measures are a prudent step to guard against negligent hiring claims and other potential losses that can result from poor hiring decisions. But these practices necessarily require employees to relinquish some of their interests in privacy and may also introduce bias into the hiring process. The Fair Credit Reporting Act (FCRA), which applies to many of these employment screening measures, requires employers to follow certain procedural requirements that seek to ensure that employees and applicants understand the scope of the information that will be sought in a background or credit check, provide informed consent to the disclosure, and have an opportunity to explain or correct the information before an employer takes adverse action.
While alleged FCRA disclosure and notification deficiencies are a frequent source of litigation between employers and employees, courts have been inconsistent in their approach to evaluating when these procedural issues cross the line into concrete harms. A recent Supreme Court decision, TransUnion LLC v. Ramirez, may further narrow applicants’ and employees’ ability to obtain relief for employers’ FCRA missteps.
This Note argues that although the FCRA’s procedural mechanisms leave much to be desired, they serve an important purpose both in protecting individuals’ interests in safeguarding their personal information and in lending predictability to employers’ hiring practices. Courts, therefore, should avoid taking an overly restrictive approach in evaluating the harms alleged by plaintiffs when making standing decisions that turn on statutory violations of the FCRA. In addition, the FCRA should be strengthened in several key respects to close the gaps left by the statute’s procedural rights and bring consistency to the employment screening landscape.
Scace, Emily, "What’s in a Form? Employment Background Checks Under the Fair Credit Reporting Act" (2022). Connecticut Law Review. 517.