Eric C. Johnson v. ADP Screening and Selection Services, Inc. et al., 2011 U.S. Dist. LEXIS 18361(D. Minn. Feb. 24, 2011)
- Pre-Adverse Action Notice Requirements.The FCRA is not an employment statute, but it imposes a duty on employers to provide prospective employees with information about their consumer reports. Thus, under 15 U.S.C. § 1681b(b)(3)(A), before a person takes an adverse employment action against a consumer based in whole or in part on a consumer report, the person intending to take such adverse action shall provide to the consumer to whom the report relates a copy of the report and a description in writing of the rights of the consumer.
- Adverse Action Notice Requirements. The FCRA only requires a person intending to take adverse action to provide a copy of the consumer report and FCRA rights before taking action. It does not mandate a waiting period between the notice and the adverse action. Note: the Court noted that Congress's use of the word "before" shows that there must be some time between notice and action.
- Adverse Action Notice Requirements. Although Plaintiff argued that the time between notice and action must be a "reasonable" amount of time, and raised the point that the FCRA gave credit reporting agencies thirty days in which to investigate disputed information, the Court found that Plaintiff’s interpretation would create an unreasonable constraint on employers. Specifically, the Court noted that if Plaintiff’s argument was to be adopted, each time an employer wanted to hire, it would be prevented from taking action if the consumer report of any applicant -- even one that it had no intention of hiring -- contained information that reduced that applicant's competitiveness. The employer would then have to place the entire process on hold and leave the position unfilled until the reporting agency had thirty days to investigate. Likewise, Defendant RHI’s interpretation rendered the term "before" meaningless, because if adopted, an employer could deliver the notice and then take adverse action within seconds.Note: The Court did not adopt either interpretation, and found that waiting 4 days (which is what took place between Plaintiff and RHI) provided Plaintiff ample opportunity to dispute the report, even under a “reasonable” standard. The Court also held that nothing in the FCRA required an employer to consider any correction that a reporting agency might make based on an investigation
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About Michael Klazema The author
Michael Klazema is the lead author and editor for Dallas-based backgroundchecks.com with a focus on human resource and employment screening developments