A putative class action is alleging that an internet retailer conducts background checks of job applicants in violation of federal consumer protection law. Information about individuals’ credit history has become critically important for a wide range of purposes. Background checks for criminal history have long been common in the hiring process, but background checks for credit history have also become widespread. The Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., governs access to, use of, and disclosure of consumer credit information for various purposes, including employment. The lawsuit claims that the defendant failed to follow the FCRA’s procedures for use of background information in the hiring process. Feldstein v. Amazon.com LLC, et al., No. 3:15-cv-07322, complaint (D.N.J., Oct. 5, 2015).
The FCRA governs activities by both credit reporting agencies (CRAs), which collect consumer credit information and package it in reports, and individuals and companies that obtain these reports and use them to evaluate individual consumers for various purposes. The FCRA defines a “consumer report” as information collected by a CRA about credit history and various personal details, including criminal history, intended for use in decisions about matters like credit, insurance, or employment. 15 U.S.C. § 1681a(d).
Prior to requesting a report from a CRA, an employer must provide “a clear and conspicuous disclosure…in writing to the” job applicant that they intend to obtain a consumer report, and they must obtain the applicant’s authorization. 15 U.S.C. § 1681b(b)(2). If the employer makes an adverse hiring decision based on information in a consumer report, the FCRA requires it to notify the applicant in advance and provide a copy of the report and a written statement of the applicant’s right to dispute its contents. 15 U.S.C. §§ 1681b(b)(3), 1681g(c).