Hunton Employment & Labor Perspectives

A hotly contested ruling in a Fair Credit Reporting Act (“FCRA”) class action case will soon be appealed to the Supreme Court of the United States.  The Ninth Circuit in Ramirez v. TransUnion LLC, Case No. 17-17244, recently granted the parties’ Joint Motion to Stay the Mandate, seeking to stay the Ninth Circuit’s mandate pending TransUnion’s filing of a petition for writ of certiorari in the Supreme Court.  The Motion to Stay comes soon after the court denied TransUnion’s Petition for Rehearing or Rehearing En Banc regarding the Ninth Circuit’s decision in Ramirez v. TransUnion LLC, 951 F.3d 1008 (9th Cir. 2020).

For the first time in the Ninth Circuit, the Court of Appeals addressed the issue of whether every class member in a class action lawsuit needs “standing” to recover damages at the final judgment stage, and found in the affirmative.  In Ramirez v. TransUnion LLC, No. 17-17244, 2020 WL 946973 (9th Cir. Feb. 27, 2020), a class of 8,185 consumers brought a class action against the credit reporting agency TransUnion LLC (“TransUnion”) pursuant to the Fair Credit Reporting Act (“FCRA”), alleging that TransUnion, knowing that its practice was unlawful, incorrectly placed terrorist alerts on the front page of consumers’ credit reports and later sent the consumers misleading and incomplete disclosures about the alerts and how to remove them.

Illinois joined a handful of other states when its prohibition on employer inquiries into applicants’ prior wage or salary information took effect this week.

Under the law, no employers in Illinois can ask about the wage or salary histories of job applicants.  If an employer receives salary history information voluntarily from the applicant, the employer still may not use that information to screen candidates.

On July 11, 2019, the House Financial Services Committee, led by Chairwoman Maxine Waters (D-CA), considered The Restricting Use of Credit Checks For Employment Decisions Act (the “Act”) as one of four bills designed to reform the Fair Credit Reporting Act (FCRA) and the credit reporting system.

In a positive development for employers, the California Court of Appeals affirmed summary judgment for an employer in a class action alleging willful violations of the Federal Fair Credit Reporting Act (“FCRA” or “Act”).  In Culberson v. Walt Disney Parks and Resorts, the plaintiffs alleged Disney willfully violated two provisions of the FCRA: (1) plaintiffs alleged Disney’s disclosures letting job applicants know they may be subject to a consumer report were not contained in a standalone document; and (2) plaintiffs alleged Disney rejected some applicants based on information in their consumer reports without first providing the notice required by the FCRA.  In affirming summary judgment, the court concluded that it need not decide whether Disney violated the FCRA, because the court found that any such violation was not willful. 

If your background check forms include too much information about rights under state law, or even grammatical errors, you might be in trouble according to the Ninth Circuit.  In Gilberg v. California Check Cashing Stores, the appeals court recently ruled against an employer for using background check disclosure forms that violate both the federal Fair Credit Reporting Act (FCRA), and California’s Investigative Consumer Reporting Agencies Act (ICRAA).

A magistrate judge in the U.S. District Court for the District of Oregon recently made findings and recommendations to dismiss a purported class action against Kroger subsidiary Fred Meyer.  The suit alleges that the retailer’s background check process for prospective employees violates the Fair Credit Reporting Act by both failing to properly disclose that a report will be run, and failing to comply with the statute’s procedural requirements before taking adverse action against an applicant.