Supreme Court Will Resolve Fair Credit Reporting Act Dispute
Author: David B. Weisenfeld, XpertHR Legal Editor
April 30, 2015
The Supreme Court has agreed to decide if an internet people-search company, Spokeo, can be sued for displaying false information about a Virginia man to potential employers. The Court will hear Spokeo v. Robins in its next term, which begins in October 2015.
This closely-watched federal Fair Credit Reporting Act (FCRA) case has attracted the attention of Google, Facebook, eBay and Yahoo, all of which are backing Spokeo. FCRA sets standards for how consumer credit information is collected, stored and shared. Several employers have had to pay hefty settlements for misusing information under FCRA.
Thomas Robins claims Spokeo damaged his employment prospects by displaying inaccurate details about his job status, educational background, age and wealth. He contends that the people-search engine portrayed him as employed in a professional or technical field when he was not, and also inflated his educational background. Since these errors appeared at a time when Robins was looking for work, he feared they would negatively affect his job search.
Spokeo defends that the lawsuit should be dismissed because Robins cannot show how he was financially harmed by the incorrect information. It also argues that as an internet people-search engine, rather than a credit reporting agency, it falls outside the scope of FCRA coverage.
However, the Obama administration disagrees and is supporting Robins. In a brief to the Supreme Court, it argues that Congress specifically authorizes lawsuits by private individuals to sue for FCRA violations.
The 9th Circuit Court of Appeals had certified this lawsuit as a class action on behalf of Robins and other consumers. Many employers feared that an adverse ruling in this case could lead to other lawsuits being brought on behalf of individuals who might not have been harmed - not only under FCRA, but also under the Americans with Disabilities Act and other laws. A Supreme Court reversal would likely mean uninjured persons could not sue for money damages.
The Federal Trade Commission had previously brought an enforcement action against Spokeo, claiming the company violated FCRA by selling consumer data to employers and recruiters without ensuring that the information was accurate. Spokeo settled those charges by paying $800,000 and agreeing to change its business practices.