United States: Job Applicant’s Claim That Employer Willfully Violated The FCRA Survives But Court Denies Class Certification

Cox v. TeleTech@Home, Inc., 2015 U.S. Dist. LEXIS 14000 (N.D. Ohio Feb. 5, 2015).

Facts: Plaintiff Anthony Cox ("Plaintiff") filed suit against TeleTech@Home, Inc. ("TeleTech") claiming that TeleTech willfully violated the FCRA by sending him an e-mail communication that allegedly rescinded his offer of employment due to information on his consumer report before providing him a copy of his consumer report and a summary of his rights. Plaintiff also moved to certify a class of all TeleTech job applicants that received the same e-mail communication purportedly rescinding their employment offers.

In August 2013, Plaintiff applied for a job with TeleTech in which he would have served as a customer service representative for Best Buy, one of TeleTech's clients. On September 10, 2013, Plaintiff received a conditional offer of employment which first required him to pass pre-employment screening. As part of the screening process, Plaintiff consented to a background check including authorization for TeleTech to obtain and review his consumer report to determine whether any criminal history would make him ineligible for the job.

On September 17, 2013, Plaintiff received a form email from TeleTech advising him that there was an issue with his pre-employment screening. The email stated that Plaintiff's offer of employment was being rescinded and that he was no longer eligible for the position. The communication also invited Plaintiff to contact TeleTech if he believed there had been error. Plaintiff received this correspondence before receiving a pre-adverse action notice from TeleTech's background check provider and his consumer report. Plaintiff claimed this letter constituted an adverse employment action in violation of the FCRA, but TeleTech argued it was merely an "on hold" letter pending a challenge to his consumer report. Once Plaintiff received a copy of his consumer report, Plaintiff confirmed that it contained a felony conviction that did not belong to him. After contacting TeleTech and informing them and the background check provider of the issue, TeleTech confirmed that Plaintiff was eligible for the position but subsequently rejected him allegedly due to Plaintiff's failure to supply a required I-9 form.

• Adverse Action. An adverse action under § 1681a of the FCRA is "a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee." This includes the revocation of a conditional offer of employment. However, the Court noted that "the FCRA is not violated until an adverse employment decision 'is communicated or actually takes effect, and an [employer] has until that time to take the necessary steps to comply with the FCRA's requirements.'" Further, "[a]n adverse action does not occur where the employer merely alerts the prospective employee that it is considering revoking the offer." In denying TeleTech's request for summary judgment, the Court determined that a reasonable jury could find that the form email that Plaintiff received constituted an adverse action and that TeleTech violated the FCRA by sending it. The Court noted that the form email stated that his offer had been rescinded, that Plaintiff was "ineligible for hire," and that the email concluded by wishing Plaintiff luck in his career search.
• Willfulness Under the FCRA. A violation for willful noncompliance of the FCRA includes reckless disregard for the FCRA's requirements. Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 56-60 (2007). Reckless disregard means "the risk of harm is either known or so obvious that it should be known." Id.
• Willfulness Under the FCRA. The Court held that a reasonable jury could find that TeleTech's actions "amounted to reckless disregard for its FCRA obligations." According to the Court, TeleTech "apparently had no systematic policy or procedure to ensure it complied with the FCRA," and the form email had been sent to hundreds of applicants over a two-year period without management being aware of the communications until the instant litigation.
• Class Certification. In denying class certification, the Court reasoned that Plaintiff failed to meet the Rule 23(a) prerequisites of typicality and adequacy. With respect to typicality the Court noted that while typicality "can exist despite some factual differences," "unique defenses applicable only to the representative plaintiff are capable of destroying typicality." In Plaintiff's case, the Court determined that it would be "unfair to saddle the rest of the class members" with Plaintiff's unique issues including that Plaintiff contacted the background check provider before receiving the pre-adverse action notice and arguably failed to submit an I-9 form required by TeleTech. Concerning Plaintiff's failure to meet the adequacy requirement, the Court pointed out that Plaintiff "may have different incentives and interests from other class members." In particular, the Court reasoned that Plaintiff will have difficulty proving actual damages and that his briefing only mentions statutory damages under a willful violation theory. The Court concluded that other class members' claims could be hurt because Plaintiff's "trial strategy at the liability phase would likely pursue the willful violation theory at the expense of an alternative negligent violation theory."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.