The Fair Credit Reporting Act (FCRA)—a federal law that regulates the collection and use of “consumer information”—covers employers who solicit third-party vendors known as consumer reporting agencies (CRAs) to run background checks on applicants and employees.  The statute specifically contains a provision that bars state law claims against employers who “furnish information” to CRAs.  In a recent decision—Saget v. Wells Fargo Bank, N.A., No. 2:13-03544(WJM), 2014 WL 4494801 (D.N.J. Sept. 10, 2014)—the District of New Jersey had occasion to invoke this provision.

By way of background, the plaintiff worked as a personal banker for the defendant, Wells Fargo Bank, and, in April 2012, was discharged for violating the bank code of ethics and business conduct.  The defendant subsequently filed a report concerning the plaintiff’s performance with Early Warning Services (EWS), “a clearing house for all persons employed in the finance industry . . . used by prospective employers in determining whether or not to hire job applicants.”  In the report, the defendant stated that the plaintiff had an “unfavorable employment record.”

The plaintiff filed suit against the defendant for tortious interference with prospective economic advantage, alleging that the report prevented him from obtaining employment in the banking and finance industry.  The Court held, however, that FCRA preempted the plaintiff’s state law claim given that the defendant had filed the report (i.e., “furnished information”) with a CRA (EWS).  The Court also concluded that the plaintiff’s allegations, as pled, did not otherwise establish a prima facie case for tortious interference.

This decision suggests that employers in the banking and finance industry may be able to avoid state law claims for tortious interference or defamation when reporting the misconduct or poor performance of former employees to CRAs.