It is well-known that a surfeit of information can be gleaned, if the user so chooses to provide it, from viewing a user's LinkedIn profile. Employment history, references, educational background, and even a photo are among the panoply of facts one can glean from a quick once-over of someone's profile on LinkedIn. A number of individuals in California think that the reference information, and solicitation of such references by employers, can lead to adverse consequences from some LinkedIn users. This is almost certainly correct. A closer question is whether these reference results that focus more on the searcher than the target can constitute an actionable consumer reports issued by a consumer reporting agency (in this case, LinkedIn) under the Fair Credit Reporting Act. At least according to the court in Sweet v. LinkedIn Corp., No. 5:14-cv-04531-PSG, 2015 WL 1744254 (N.D. Cal. Apr. 14, 2015), when the search results are largely instructive as to the characteristics of the searcher instead of the target, such information cannot be that which triggers protections for those that are the target of the search.
Tracee Sweet (Sweet) was looking for a job in the hospitality industry, and as part of the search, she submitted her resume to a potential employer through LinkedIn. After an interview, this employer informed Sweet she had been hired. A week later, the company called Sweet and rescinded her offer. After inquiring with the general manager of the company as to the reasoning behind the recession, Sweet was informed that the company had utilized LinkedIn to check some of her references, and based on those references, they changed their mind.
The company had used LinkedIn's "Reference Searches" function, a tool that permits employers to find people with whom the applicant may have worked with previously. Specifically, the tool allows paying subscribers to initiate searches on other LinkedIn members. Such searches produce two types of information: (1) the name and list of the search target's current and former employers; and (2) a list of other LinkedIn members who are in the same network as the searching party and who may "have worked at the same company during the time period as the target." This Reference Search results include, for each potential reference, the name of the employer in common between the reference and the target, and the reference's position and years at the common employer. The Reference Search tool also encourages the employer to contact these references through an introduction facilitated by LinkedIn. LinkedIn does not tell the targets of Reference Searches when users run searches on them.
Sweet, as well as similarly situated plaintiffs, came to believe that the use of the Reference Searches function by their potential employers illegally cost their them jobs. Such a belief led to a filing of a suit in which the plaintiffs alleged that this function violated their rights under the Fair Credit Reporting Act (FCRA).
The FCRA, 15 U.S.C. § 1681 et seq., is designed to protect consumers from the dissemination of inaccurate information about them. See Kates v. Croker Nat'l Bank, 776 F.3d 1396 (9th Cir. 1985). The statute seeks to insure that consumer reporting agencies exercise their duties with fairness, impartiality, and a respect for the consumer's right to privacy. The operative sections of the FCRA apply only to "consumer reporting agencies" which provide "consumer reports." The statute defines a "consumer report" as, in relevant part:
(A) any written, oral or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for ... (B) employment purposes;
15 U.S.C. § 1681a(d)(1)(A)-(B).
As to the instant case, first, the court held that the publications of the employment histories of the targets of the Reference Searches are not consumer reports because the information contained therein was acquired solely from LinkedIn's transactions or experiences with the target. Put another way, any information subsequently distributed to a third-party was information that would be unavailable but for the voluntary provision of such information by the target. The FCRA excludes from the definition of consumer report any report that holds information that pertains solely to interactions between the consumer and the person making the report. See 15 U.S.C. § 1681a(2)(A)(i). The court also observed that, as a practical matter, the subsequent sharing of information with third-parties online by LinkedIn is the entire reason why LinkedIn users provide their employment histories to LinkedIn in the first place.
Second, even assuming arguendo that LinkedIn's publication of the employment histories of the targets of the Reference Searches was not within the purview of the "transaction or experience" exception, the plaintiffs claims would still fail because it could not raise a plausible inference that LinkedIn was acting as a consumer reporting agency when publishing these histories. An entity does not become a consumer reporting agency simply because it conveys, with the consumer's consent, information to a third party to provide a product or service that the consumer has requested. See 15 U.S.C. § 1681a(f) (further background on the definition of consumer reporting agency). As such, the information about the employment histories of the targets of Reference Searches is gathered not to make consumer reports, but to carry out consumers' information-sharing objectives, and is therefore non-actionable under the FCRA.
Finally, the court rejected the plaintiffs' argument that the references included in the Reference Search bears on the "character, general reputation, mode of living" and other relevant traits of those, such as the plaintiffs, that are targets of the Reference Searches. For instance, according to the plaintiffs logic, whether a target's listed references work in a certain industry or live in a certain geographic area bears on the target's character insofar as such references indicate whether a target is well-connected in the industry or associates with people from that location. As an example, if a Reference Search yields to the initiator of the search a reference to Bernard Madoff, the perceived characteristics of such a reference (obviously pejorative in this example) could be also illustrative of the characteristics of the target. Unfortunately for the plaintiffs, this claim is premised on a fundamental misunderstanding of the relationship between the relationship between the results of the Reference Search and the search initiator.
Rather, the results of the Reference Search are those in the searcher's network and not the target's network, and thus, such results communicate whether the searcher, and not the target, have the characteristics referenced above. See also Trans Union Corp. v. FTC, 82 F.3d 228 (D.C. Cir. 1996) (information about job applicants' own employment histories bear on the applicants' character, but information about the employment histories of others do not) (emphasis in original). Accordingly, these types of results are not consumer reports as defined in the FCRA.
Although the court granted the defendants' motion to dismiss, the court, pursuant to Ninth Circuit protocol, allowed the plaintiffs leave to amend their complaint, as such complaint was not deemed to be "beyond cure."