Excerpted from Eric Berman’s online article dated September 16, 2020
In Kenn v. Eascare, LLC, a U.S. District Court judge has found that the plaintiff lacked standing to sue her former employer under the federal Fair Credit Reporting Act for conducting a background check when she was hired that did not technically comply with the statute’s disclosure requirements.
When the plaintiff signed a disclosure form and authorization allowing Eascare to perform a background check that could include a look into her credit history, the form included a waiver releasing the defendant from any liability resulting from the background check, as well as other allegedly extraneous language.
After a year, the plaintiff left the company alleging that the employer retaliated against her for complaining of sexual harassment. In addition to bringing discrimination and retaliation claims, the plaintiff brought a putative class action under the FCRA, arguing that by including the liability waiver and other additional language on its disclosure form and accordingly running the check without proper authorization, the employer violated the FCRA’s “standalone” disclosure and authorization requirements, creating a cause of action under the statute.
But the claim was dismissed, with the judge finding that the plaintiff failed to demonstrate an injury-in-fact that would give rise to a cause of action. The judge stated, “The mere fact of technical noncompliance [with the statute] does not establish that individuals have suffered a sufficiently concrete injury. The Court thus concludes that violation of the FCRA’s standalone document requirement does not automatically cause a concrete injury for purposes of Article III standing. In doing so, the court joins the vast majority of other courts that have so held.’”
Pierce Atwood litigation and class action counsel Melanie A. Conroy said that Article III standing is poised to be a hotly contested issue as privacy rights are encoded in more statutes. She stated, “I have little doubt you will see this case extensively analyzed and cited by privacy class action litigators as the law continues to develop.”