When the U.S. Supreme Court delivered its opinion in Spokeo, Inc. v. Robins last May, employers, as well as the companies that provide employers with job applicants’ background information, argued that the ruling was a significant change to the law of standing. Despite the smokescreen they’ve attempted to raise, however, Spokeo hasn’t changed standing at all, and consumers (including job seekers) are just as empowered to seek redress for Fair Credit Reporting Act violations today as they were before.
What Is the Fair Credit Reporting Act?
According to the Federal Trade Commission’s Consumer Information site, FCRA “promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies,” and does so by limiting circumstances in which such organizations can provide reports including background checks, credit histories, and criminal records to employers in hiring or screening job applicants. The provisions of the FCRA that are most applicable to job applicants and employees are Sections 1681b(b)(2) and (b)(3), which Congress enacted to make sure that applicants and employees would know that they were authorizing a consumer report to be run on them, and to make sure that they then would be able to review a copy of that report (and receive a statement of their rights under the FCRA) before an employer took an adverse action against them.
When a reporting agency violates FCRA, it can be held liable for statutory damages, actual damages, attorney fees, and costs, and punitive damages.
The Facts in the Spokeo Case
Spokeo promotes its online service as a “people search engine,” crawling the web to collect information about individuals, including addresses, phone numbers, marital status, approximate ages, occupations, interests, finances, shopping behavior, and other personal data. Thomas Robins alleged that the information Spokeo published about him – that he was married and had children, employed, affluent, possessed a graduate degree, etc. – was incorrect. He filed a class action lawsuit, alleging that because Spokeo acts as a “consumer reporting agency” for FCRA purposes, its dissemination of false information endangered his employment and earning opportunities as well as others in similar situations.
How the case made its way to the Supreme Court is key to dispelling the myths cast by employers about the import of the decision.
First, the U.S. District Court for the Central District of California dismissed Robins’ complaint, finding he had not pled an “injury in fact” as required by the U.S. Constitution. On appeal, the Ninth Circuit Court of Appeals disagreed, finding that FCRA “does not require a showing of actual harm when a plaintiff sues for willful violations,” and that Spokeo’s alleged violation met the “injury in fact” requirement.
The U.S. Supreme Court vacated the Ninth Circuit’s ruling, remanding the case for further consideration of whether Robins had sufficiently alleged an injury that was “concrete.”
Meeting the Standing Threshold
Under Article III of the Constitution, a plaintiff must have standing to bring suit in a case or controversy. One element of the standing requirement is that the plaintiff must have suffered an injury in fact that is both “particularized” and “concrete.”
Particularization generally is an easy Threshold to overcome, so long as the plaintiff demonstrates that he or she has been affected “in a personal and individual way.” for an injury to be “concrete,” the harm doesn’t need to just be physical or economic – it also can be intangible or the risk of a harm. When deciding if an intangible harm is sufficiently concrete for Article III standing, courts look to history and the common law, and the judgment of Congress. If the injury has a “close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts” or if it is a type of harm identified by Congress, the plaintiffs likely will have standing.
Remove the Smoke and Mirrors and the Law Remains the Same
The Court did not apply its emphasis of the law of standing to the facts before it. Justice Alito made it quite clear that the Court took “no position as to whether the Ninth Circuit’s ultimate conclusion – that Robins adequately alleged an injury in fact – was correct.” Thus, contrary to pro-employer pundits, Spokeo neither e changed the law nor reinterpreted the Congressional intent behind it. FCRA’s requirements and consumer protections remain firmly in place, and the statute still grants job applicants and other individuals the right to pursue legal action when companies violate its provisions.
The attorneys in Outten & Golden’s Class Action Practice Group have extensive experience representing employees and job applicants in FCRA actions, and will continue to monitor developments following Spokeo. for more information about the growing use of criminal background checks in the job screening process, please watch this Employment Law Channel interview with Outten & Golden partner Ossai Miazad.