Feb 6, 2024
The Appeals Court of Massachusetts has announced its decision for a case concerning Fair Credit Reporting Act (FCRA) violations. The court declared that the case may proceed despite the plaintiff admitting it had caused no harm.
The Cause
As such, the class action lawsuit will proceed against her former employer. In this case, the plaintiff claimed a pre-hire background check had failed to comply with the FCRA disclosure requirements. According to the case, the plaintiff had previously applied for a position as an emergency technician for an ambulance company.
The company required her to sign a disclosure form and authorize them to perform a background check. According to the forms, the check could include a credit history review. However, the plaintiff claimed the disclosure contained extraneous language. One example concerns a waiver releasing the employer from liability that could result from the background check.
The Lawsuit
The plaintiff worked for the employer for approximately a year. Allegedly, she left following claims of sexual harassment. She then sued the company for discrimination and harassment. This decision evolved into a putative class action claiming the employer willfully violated the FCRA.
The latter case claimed that the employer’s deficient disclosure form violated the worker’s privacy rights. Furthermore, it failed to inform the plaintiff about the background check. The employer responded to the allegations by moving the case to the federal court and requesting a move for dismissal.
The federal court granted the move and remanded the case to the state court. Once again, the employer moved for dismissal due to lack of standing. This success inspired the plaintiff to appeal, which led to a three-judge panel reversing the decision.
This panel found that Article III restrictions do not limit state courts unlike their federal counterparts. The panel reminded both parties that a plaintiff may sue for a statutory violation under Massachusetts law. However, the plaintiff must prove that they have suffered an injury, a statute will allow them to recover, and the state’s area of concern covers the injury.
The panel determined that these standing requirements would cover cases where technical violations of the FCRA occur regardless of actual harm. In this case, the plaintiff allegedly did not receive FCRA-compliant disclosures. Because the FCRA details recovery methods, the plaintiff may sue under state law. As such, the panel vacated the judgment. This decision allowed the plaintiff to proceed with their claims in the lower court.
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Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.