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Oregon Court Dismisses FCRA Class Claim Against Employer - (7/9/2018)
United States-Oregon


Troutman Sanders LLP - Patrick Dillard, Cindy D. Hanson and David N. Anthony

On June 21, the United States District Court in Oregon dismissed a plaintiff’s class action complaint alleging his potential employer violated the disclosure and pre-adverse action notification requirements of the Fair Credit Reporting Act (“FCRA”).

Plaintiff Daniel Walker applied for employment with defendant Fred Meyer, Inc. As part of the application process, Fred Meyer provided Walker with a disclosure form and an authorization form regarding its intent to procure a background report on Walker. Thereafter, Fred Meyer obtained from a background screening company a report that contained negative information on Walker. Fred Meyer provided a pre-adverse action notice to Walker, explaining that he could contact the background screening company about issues regarding the report.

The Court’s well-reasoned opinion laid out Walker’s baseless arguments and then systematically dismantled them. Walker claimed the consumer report disclosure language was overshadowed by information about investigative consumer reports, which differ from general consumer reports. Fred Meyer’s disclosure mentioned both reports in the single initial disclosure without distinguishing between the two. However, the disclosure then set out a consumer report disclosure and did not mention a potential investigative report until the final paragraph, which stated “If [the background screening company] obtains any information by interview, you have the right to obtain a complete and accurate disclosure of the scope and nature of the investigation performed.” Contrary to Walker’s argument, the Court found this sentence in fact emphasized that the disclosure was not itself an investigative report disclosure.

Likewise, the Court rejected Walker’s claim that the authorization form was unlawful because it was “riddled with extraneous information.” The Court differentiated the requirements for the authorization and the disclosure, noting that the statute does not require the authorization to consist solely of the authorization. The Court also found presenting the disclosure as a separate document along with the authorization “did not destroy the stand-alone character of the disclosure.”

Walker’s pre-adverse action notice claims did not fare any better. Walker claimed Fred Meyer violated the statute by only directing him to discuss his report with the background screening company. Although the Court found he had Article III standing to bring this claim, it rejected the argument on the merits. The Court found no support suggesting that Fred Meyer’s notice violated the FCRA because it did not inform Walker he could contact the employer directly, or the date by which he must do so.

This opinion highlights the importance of carefully following the requirements of the FCRA when obtaining a background report on prospective employees. Fred Meyer defeated Walker’s claim because it provided disclosure and authorization notices in separate documents, apart from a job application or employee manual.

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