Under the Fair Credit Reporting Act, when a potential employer is considering using a background check to deny an applicant employment, the employer must follow a prescribed adverse action process. For qualifying transportation employers, this means the employer must provide the applicant with a notice of adverse action within three days of the final adverse decision. The District Court for the Northern District of Illinois, however, recently confirmed that even if an employer fails to follow the proper procedure, an applicant may not have standing to bring an adverse action claim if the background check at issue is accurate. This could be a significant decision for employers facing adverse action claims from applicants who indisputably have a disqualifying conviction in their background.
Specifically, in Ratliff v. A&R Logistics, Inc., plaintiff Jerome Ratliff, Jr. claimed that A&R Logistics declined to hire him based on his background check without following a proper adverse action process. In response, A&R Logistics moved to dismiss the complaint on the ground that Ratliff had not suffered any injury-in-fact stemming from the alleged violation and, therefore, had no standing. According to A&R Logistics, Ratliff could not show any injury-in-fact because the background check at issue was accurate.
The Court conducted its standing analysis in two parts. It first considered whether Ratliff had suffered an “informational injury” that could satisfy the injury-in-fact requirement for standing. The Court found that a plaintiff could show “informational injury” if a third party was disseminating inaccurate information about him or her that could cause concrete harm. However, because Ratliff failed to allege that the background check on him contained any inaccuracies, he could not show any “informational injury.” Effectively, Ratliff could not show that he suffered any appreciable “real life” injury by not receiving a copy of his accurate background check.
The Court also considered whether the failure to provide Ratliff with a background check constituted an “invasion of privacy” sufficient to demonstrate injury-in-fact. The Court quickly disposed of that argument. In the Court’s view, the FCRA’s adverse action provision is not designed to protect consumer privacy. As a result, Ratliff could not show that the statutory violation at issue constituted a privacy invasion sufficient to support an injury-in-fact.
Ultimately, the Court’s decision in Ratliff follows a reasonable approach to injury-in-fact analysis that is rooted in the Supreme Court’s Spokeo decision. Simply stated, the violation of a statute alone does not constitute an injury-in-fact for standing purposes without an accompanying real-world injury.