Consumer Financial Services Law Monitor

Consumer Financial Services Law Monitor

monitoring the financial services industry to help companies navigate through regulatory compliance, enforcement, and litigation issues

Background Screening

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Seventh Circuit Affirms Dismissal of FCRA Disclosure Claim on Standing Grounds

Posted in ALL CFS Blog Entries, Background Screening
On August 1, the Seventh Circuit Court of Appeals in Groshek v. Time Warner Cable, Inc. affirmed the Eastern District of Wisconsin’s dismissal of a putative Fair Credit Reporting Act class action on the basis of Article III standing.  Specifically, applying the Supreme Court’s decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016),… Continue Reading

Join Us for a Webinar on August 24 – A Review of Recent FCRA Trends and Developments

Posted in ALL CFS Blog Entries, Background Screening, CFS Events, Credit Reporting & Data Brokers, Featured Posts
Join Troutman Sanders attorneys David N. Anthony, Cindy D. Hanson and Meagan A. Mihalko for a timely discussion of recent case studies and case law developments affecting the credit reporting and background screening industry. The discussion will include an update on the effects of Spokeo, as well as an overview of other recent Fair Credit Reporting… Continue Reading

Missouri Appellate Court Affirms Dismissal of FCRA Class Action Based on Application of Spokeo and Federal Standing Rules

Posted in ALL CFS Blog Entries, Background Screening
On July 25, the Missouri Court of Appeals affirmed a state trial court’s dismissal of a putative Fair Credit Reporting Act class action against a large retailer based on standing issues.  Most notably, the court did so in reliance on Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (May 16, 2016), and Article III standing… Continue Reading

Defendant Seeks To Stymie Plaintiff’s ‘False Pretense’ Claim Under the FCRA

Posted in ALL CFS Blog Entries, Background Screening
In Patel v. Comcast Corporation, plaintiff consumer Mounang Patel brought a purported class action lawsuit against defendant Comcast Corporation, arguing that Comcast unlawfully obtains background checks (also referred to as consumer reports) on consumers under false pretenses.  On July 17, Comcast moved to dismiss this class claim on the ground that Patel failed to allege… Continue Reading

Indiana Governor Issues Executive Order “Banning the Box”

Posted in ALL CFS Blog Entries, Background Screening
Indiana Governor Eric Holcomb has issued an executive order “banning the box” for jobs within the executive branch.  Effective July 1, applicants for employment in the executive branch will no longer be subject to inquiries about their criminal history at the initial application stage, unless the conviction for a specific crime would disqualify the applicant… Continue Reading

Financial Investment Company Named in Background Check Lawsuit

Posted in ALL CFS Blog Entries, Background Screening
A nationwide financial investment firm was named on June 30 in a putative class action lawsuit filed in federal district court in Oregon.  The case, filed by plaintiff Dustin Kampert, alleges the firm violated the Fair Credit Reporting Act in its background check process related to employment or, alternatively, procured consumer reports without a permissible… Continue Reading

CFPB Issues Rule Banning Class Action Waivers In Arbitration Provisions

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Featured Posts, State Attorneys General, CFPB, & FTC
On July 10, 2017, the Consumer Financial Protection Bureau issued its long-awaited final rule banning class action waivers in arbitration provisions for covered entities, as well as requiring the covered entities to provide information to the CFPB regarding any efforts to compel arbitration. This rule is of significance to any financial services company that utilizes… Continue Reading

Court Certifies FCRA Background Check Disclosure Claim Against Employer That Relied on Vendor’s Disclosure Form

Posted in ALL CFS Blog Entries, Background Screening
A new Florida federal district court case is yet another reminder of the minefield of federal and state regulations governing employer criminal background check forms.  In Graham v. Pyramid Healthcare Solutions, the Court certified a class action against the employer under the federal Fair Credit Reporting Act and ruled that whether the employer willfully violated… Continue Reading

USPS’ Motion to Dismiss Putative FCRA Class Action Denied by Wisconsin Magistrate Judge

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
A Wisconsin federal magistrate judge denied the United States Postal Services’ attempt to dismiss a Fair Credit Reporting Act putative class action, holding that the plaintiff’s complaint sufficiently alleged an injury-in-fact.  According to the complaint, plaintiff Rondo Tyus applied for a security clearance to work at the USPS.  The USPS obtained a criminal background report,… Continue Reading

Employer Seeks Supreme Court Review of Ninth Circuit Finding of Willful FCRA Violation

Posted in ALL CFS Blog Entries, Background Screening
On January 20, 2017, the Ninth Circuit Court of Appeals issued a decision of first impression in Syed v. M-I, LLC, a putative class action, when it held that a prospective employer willfully violated the Fair Credit Reporting Act by including a liability waiver in its FCRA background check disclosure form.  In the underlying case, Syed applied… Continue Reading

Five Guys Faces Background Check Lawsuit Over Allegedly Improper Disclosures

Posted in ALL CFS Blog Entries, Background Screening
Five Guys Enterprises LLC—franchisor of the popular Five Guys Burger Co.—and a California franchisee are facing a lawsuit from a former employee alleging numerous violations of the federal Fair Credit Reporting Act and California state law.  The plaintiff, Jeremy Lusk, alleges he began working for Five Guys in August 2016.  He alleges that in the… Continue Reading

District Court Rejects Notion That An Improper Background Check Disclosure Automatically Renders A Subsequent Background Authorization Improper

Posted in ALL CFS Blog Entries, Background Screening
In the world of background check litigation under the Fair Credit Reporting Act (“FCRA”), one theory that plaintiffs frequently assert is that if the background check disclosure provided by the employer violates the FCRA, then the authorization based on that disclosure is also necessarily inadequate.  Under the FCRA, an employer desiring to obtain a criminal… Continue Reading

Pennsylvania to “Ban the Box” by Executive Order

Posted in ALL CFS Blog Entries, Background Screening
Pennsylvania Governor Tom Wolf announced this month that he will “ban the box” for some applicants applying for certain state government positions, and that he will do so by executive order, which would take effect as of July 1, 2017.  The executive order would affect hiring in nearly 70,000 state jobs within the executive branch… Continue Reading

Plaintiff Seeks Remand of Sodexo FCRA Lawsuit

Posted in Background Screening
Sodexo, Inc. recently found itself named in a putative Fair Credit Reporting Act class action based on alleged improprieties in its background check disclosure forms and its pre-adverse action process.  Sodexo removed the case from Pennsylvania state court to the United States District Court for the Western District of Pennsylvania on April 7, claiming the… Continue Reading

Spokeo Strikes Again: Fourth Circuit Reverses and Dismisses $12 Million FCRA Class Action on Spokeo Grounds

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Cyber Security, Information Governance & Privacy, Debt Buyers & Collectors, Featured Posts
In one of the most significant post-Spokeo decisions to date, the Fourth Circuit unanimously reversed and dismissed a nearly $12 million Fair Credit Reporting Act (“FCRA”) class action judgment, finding plaintiff, Michael T. Dreher, lacked Article III standing to bring his claims. The decision provides much needed clarity from the Fourth Circuit on the viability… Continue Reading

FTC Issues Guidance for Employment Background Screening

Posted in Background Screening
On April 28, the Federal Trade Commission published a blog entitled “Background Checks on Prospective Employees: Keep Required Disclosures Simple.”  In this online publication, the FTC issued guidance to employers on how to comply with the Fair Credit Reporting Act if they intend to use a consumer report (commonly referred to as a background check)… Continue Reading

Sodexo Defends FCRA Class Action Alleging Failures in Hiring Process

Posted in ALL CFS Blog Entries, Background Screening
Sodexo, Inc. was recently named as the defendant in a putative Fair Credit Reporting Act class action based on alleged improprieties in its hiring procedures.  The case, Piveronas v. Sodexo, Inc., was originally filed in the Court of Common Pleas of Allegheny County, Pennsylvania, and removed to the United States District Court for the Western… Continue Reading

California Approves New Regulations Regarding Consideration of Criminal History in Employment Decisions

Posted in ALL CFS Blog Entries, Background Screening
On March 27, the Office of Administrative Law for the State of California announced new regulations that even further limit employers’ ability to consider a job applicant’s criminal history when making hiring decisions. Except if otherwise permitted by law, employers are prohibited from taking into consideration during the hiring process a number of enumerated offenses, including arrests… Continue Reading

Health Care Management Company Sued in FCRA Class Action

Posted in ALL CFS Blog Entries, Background Screening
Lawsuits under the Fair Credit Reporting Act resulting from allegedly inaccurate background checks do not appear to be going away.  Just last week, plaintiff Michelle Petry filed a class action against IDE Management d/b/a Cathedral Health Care Centers, in the Southern District of Indiana, claiming that she was denied a job as a result of… Continue Reading

North Carolina House Votes Overwhelmingly to “Ban the Box”

Posted in ALL CFS Blog Entries, Background Screening
The North Carolina House of Representatives recently voted 98-14 to “ban the box” for state agency hiring.  The bill would not apply to private employers or to state positions that “involve direct interaction with minors or the elderly.”   House Bill 409 would prevent state agencies from inquiring into an employment applicant’s criminal history at the… Continue Reading

Join Us for a Complimentary Webinar – Post-Spokeo Survey – An Analysis of Trends and Developments in the Courts

Posted in ALL CFS Blog Entries, Background Screening, CFS Events, Credit Reporting & Data Brokers, Featured Posts
On Wednesday, April 19 from 12-1 p.m. ET, Troutman Sanders attorneys Mary Zinsner and Jon Hubbard will present a survey of consumer protection decisions from across the country interpreting and applying the Supreme Court’s ruling in Spokeo, Inc. v. Robins.  The decisions from the federal circuits are conflicting and some “no-injury” class action proceedings are… Continue Reading

Virginia Federal Court Dismisses FCRA Permissible Purpose Claim on Standing Grounds

Posted in ALL CFS Blog Entries, Background Screening
On March 29, 2017, a judge in the United States District Court for the Eastern District of Virginia dismissed a Fair Credit Reporting Act claim against Equifax Information Services, LLC alleging that Equifax provided the plaintiff’s consumer report to a third party without an FCRA permissible purpose.  Dilday v. DIRECTV, LLC et al., No. 3:16CV996-HEH. … Continue Reading

Court Rejects FCRA Background Check Settlement As Providing Insufficient Recovery For Class Members In Light Of Ninth Circuit Ruling

Posted in ALL CFS Blog Entries, Background Screening
This past week, the U.S. District Court for the Northern District of California declined to preliminarily approve a class action settlement of a Fair Credit Reporting Act (FCRA) claim because the payment to class members was unreasonably low.  In the Court’s view, the class members deserved more in light of the strengths of the plaintiff’s… Continue Reading

California’s Regulation Regarding Consideration of Criminal History in Employment Decisions

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
The Fair Employment and Housing Council published the final text for the “Consideration of Criminal History in Employment Decisions” regulation on March 27, 2017.  This regulation, effective July 1, 2017, impacts employers’ consideration of criminal history information for employment purposes, including those related to layoffs.  Employers are well-advised to take a fresh look at their… Continue Reading