LinkedIn Gets Sued Over Employee Background Checks


Linked in gets sued employment background checksI have to give attorney Audrey E. Mross, for putting this case on my radar.

Many of y’all know that I gave I talk on the Fair Credit Reporting Act, from the employer’s perspective.  I shared the slide presentation here in my blog.

Employers have a light burden under the Fair Credit Reporting Act

If there was one take away, it was this: an employer’s burden to comply with the Fair Credit Reporting Act is so low and inexpensive, there really is no excuse for not complying.  The real burden lies with the Consumer Reporting Agencies.

A Consumer Reporting Agency is an individual or entity who for a fee regularly assembles or evaluates consumer credit information for the purpose of furnishing consumer reports to third parties.

LinkedIn sued over employee background checks because it is a “credit reporting agency”?

LinkedIn has gotten into some hot water.  A lawsuit filed in California, of all places, alleges that LinkedIn is a consumer reporting agency and that it failed to comply with the Fair Credit Reporting Act’s compliance mandates

The plaintiffs allege that:

“A separate webpage in the ‘Premium Help Center’ on Defendant’s website explains to potential employers how to find ‘Trusted References for Job Candidates” (emphasis added) by going to a member’s profile and then clicking the “Search for References’ link.

Once a user selects the Search for References link, LinkedIn generates a report containing the names, locations, employment areas, current employers, and current positions of all persons in the user’s network who may have worked with the applicant (‘Reference Report’).”

Aha!  I bet one of the fights will be over whether LinkedIn’s Reference Report is in fact a consumer report. This attack on LinkedIn, and I am not commenting on whether it is legitimate or not, should give employers pause.  Each of the plaintiffs in this case found out that their prospective employer had used LinkedIn’s Reference Report to make an employment related decision.

Employers also had regulatory obligations in this case but probably didn’t comply

We don’t know if the employers complied with its obligations under the FCRA, but I would bet they did not.  Many times an employer learns of its obligations, not independently, but from a Consumer Reporting Agency.  Therefore, we could probably assume that many of the employers probably did not comply with the FCRA.

Regardless of LinkedIn’s liability in this case, the prospective employers had their own obligations under the FCRA.  It was and is their job to recognize when they are getting consumer information from a consumer reporting agency.  I think it is pretty easy to say, after the fact, that LinkedIn might have some trouble in this case, but what about the employers?  I don’t think the litigation ends with LinkedIn.

Employers should give applicants and employees same notices they give for credit reporting checks

Employers using LinkedIn’s Premium Search for Reference feature, may want to consider giving applicants and employees the same notices they would normally give when they get consumer information from a more traditional Consumer Reporting Agency.

If you don’t have these documents, I can pass on the forms promulgated by the Consumer Financial Protection Bureau.

Just shoot me an email.



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