A Magistrate Court judge in Louisiana has denied a defendant’s motion to dismiss claims it violated the Fair Credit Reporting Act over claims about how it handled an employment background check that led to the plaintiff being fired just a few months after being hired. The ruling is a reminder that FCRA compliance risks extend well beyond traditional credit reporting and into employment screening practices.
The background: The plaintiff alleged that the defendant conducted a background check in connection with employment without first providing a clear and conspicuous standalone disclosure or obtaining proper written authorization as required by the FCRA.
- According to the complaint, the plaintiff disclosed prior criminal history during the hiring process and was initially hired, only to be terminated months later after the defendant relied on the background report.
- The plaintiff also alleged that the background check was procured after internal workplace complaints were raised and that the defendant failed to provide a copy of the report and a summary of FCRA rights before taking adverse action.
The ruling: Judge Karen Wells Roby of the District Court for the Eastern District of Louisiana rejected the defendant’s argument that the FCRA claim should be dismissed at the pleading stage. In doing so, the judge emphasized that the statute requires a standalone disclosure and written authorization before procuring a consumer report for employment purposes, and specific notices before adverse action is taken.
- The judge noted that, at this stage of the case, the plaintiff had plausibly alleged violations of these requirements. In language that will resonate with compliance teams, the court underscored that the FCRA sets out “specific information at specific times” that must be provided to individuals before adverse employment decisions are made.
- Judge Wells Roby also declined to resolve factual disputes over whether the background check was obtained from a consumer reporting agency, finding that such questions are not appropriate for dismissal at this early stage.
