Littler’s analysis of the Federal Trade Commission’s 40 Years of Experience with the Fair Credit Reporting Act report. Who should read it? Every employer who uses credit reports for employment purposes. Why?
“For many years, it was relatively uncommon to see lawsuits or FTC enforcement actions against employers for alleged violations of the [Fair Credit Reporting Act (FCRA)]. The plaintiffs’ bar and the FTC regularly targeted the credit bureaus, merchants and lenders, but did not target employers. Now, times have changed. In the past few years, there has been an unprecedented spike in class action and single-plaintiff lawsuits against employers for alleged violations of the FCRA. As a result, compliance with the various provisions of the FCRA is essential for all employers that use background reports even in part to make hiring and employment decisions.…Developing familiarity with the Staff Report also may help employers take measures to minimize the risk of class action FCRA lawsuits. The FCRA has two remedy provisions. Section 617 provides a remedy for ‘negligent’ noncompliance with the FCRA.11 Section 616 provides a remedy for ‘willful’ noncompliance with the FCRA. An important difference between Sections 617 and 616 is that the former requires the plaintiff to prove actual damages to state a viable cause of action, but the latter does not. For a willful violation, the plaintiff can recover statutory damages of at least $100 and up to a maximum of $1,000. The need for individualized proof of actual damages and causation can preclude class certification under Federal Rule of Civil Procedure 23(b)(3). For that reason, the plaintiffs’ bar regularly tries to mount class action claims against employers for alleged willful violations.”
Read the full update here»Google+