Privacy & Information Security Law Blog

As reported in the Hunton Employment & Labor Perspectives Blog:

The U.S. Department of Justice has moved to intervene to defend the constitutionality of the Fair Credit Reporting Act (“FCRA”) against a consumer reporting agency accused of violating § 605 of the FCRA.

On November 23, 2010, Shamara T. King filed suit against General Information Services, Inc. (“GIS”) in Pennsylvania federal court claiming violations of the FCRA. (See, King v. General Information Services, Inc., No. 2:10-CV-06850 (E.D. Pa. Nov. 23, 2010). Specifically, King claims that when she applied for a job with the United States Postal Service, GIS performed a background check that included details about a car theft arrest that occurred more than seven years prior to the requested background check. According to § 605(a)(5) of the FCRA, consumer reporting agencies cannot provide adverse information, except for criminal convictions, “which antedates the report by more than seven years.”

GIS claims that the seven-year limitation violates the First Amendment of the United States Constitution. Among other things, GIS argues that information regarding arrest records is protected commercial speech. Specifically, GIS claims that the FCRA’s prohibition on most adverse information more than seven years old is a “content- and speaker-based restriction on speech,” noting that the law does not prohibit employers from considering such information but prohibits reporting agencies from providing such information. The U.S. Government has taken a contrary position, but has declined to elaborate on its position. A spokesperson from the Department of Justice states that the U.S. Government intervened to protect the constitutionality of the FCRA’s seven-year limitation.

Although King brought suit against the consumer reporting agency, employers should take note of the results of this case. Employers must ensure that the consumer reporting agency they use performs searches that are in compliance with the FCRA in order to avoid being a co-defendant in a similar suit. Employers should also be aware that the FCRA does not just cover credit or criminal background checks, but also covers driving records and any other report obtained from a consumer reporting agency. Because of an influx of workplace violence lawsuits and negligent hiring lawsuits, employers are more willing to perform background checks on job applicants. While this is a good business practice, a better business practice is to ensure that background checks comply with the FCRA.