United States: Employers Prevail In FCRA Class Actions

Last Updated: March 1 2018
Article by Rod M. Fliegel and Allen P. Lohse

The FCRA is not a classic employment law, but regulates the procurement and use of background checks by employers. Before procuring a background check from a consumer reporting agency (CRA), the employer must disclose its intention to do so and obtain the individual's authorization (known as the "stand-alone disclosure requirement"). And, before taking any adverse action against the individual based, in whole or in part, on the background check, the employer must provide the individual with a copy of the background check and the statutory summary of FCRA rights (known as the "pre-adverse action" notice). The plaintiffs' bar has been flooding the courts with class action lawsuits asserting technical violations of these requirements.1 Some of these lawsuits have settled on a class-wide basis. However, employers have notched some significant victories in recent cases.

Lewis v. Southwest Airlines

In Lewis, the plaintiff asserted classwide and "willful" violations of the FCRA's disclosure requirement and corresponding violations of California's fair credit reporting act. The plaintiff did not accuse Southwest of ignoring the FCRA outright, but rather of impermissibly presenting the statutory disclosure to him along with other supposedly "extraneous" information. Southwest successfully moved to transfer the case from California to Texas, persuaded the court to trim the plaintiff's California claims by filing a motion to dismiss, and then convinced the court to dismiss the suit by filing a motion for summary judgment. Relying on the U.S. Supreme Court's opinion in Safeco Insurance Company of America v. Burr, the court agreed that Southwest's precise disclosure obligation was too uncertain to support a willful violation when the plaintiff applied for a job in January 2015. The court reasoned that the district courts that have considered whether extraneous information in an FCRA disclosure constitutes a willful violation have provided inconsistent and even conflicting answers.2

Branch v. GEICO

In Branch, GEICO did not defeat a pre-adverse action claim on summary judgment, but did beat the plaintiff's motion to certify a class action. The plaintiff alleged that GEICO took an adverse action when it assigned the plaintiff's background check a preliminary grade of "Fail"—based on GEICO's "Adjudication Process." Because this grading occurred before the plaintiff was provided her report and the statutory summary of rights, she alleged a FCRA violation. GEICO moved for summary judgment—relying on substantial evidence that its preliminary grading is not a "final" decision and citing to prior cases holding that the grading (or scoring) of a background check, without more, does not constitute an adverse action. The court acknowledged the "legitimacy" of GEICO's pre-adverse action notice processes, and commented that they exemplify "the very manner in which dispute processes are supposed to operate under the FCRA." The court also agreed that the grading of a background check, alone, does not constitute an adverse action. However, the court denied summary judgment because a GEICO employee allegedly told the plaintiff, on the day of the grading, that the plaintiff's job offer had been rescinded. If GEICO's employee deviated from its normal process by denying the plaintiff an opportunity to dispute the background results, a jury could find the plaintiff's "Fail" grade was an adverse action. At the same time, the court denied class certification because no common proof existed as to whether calls made to any other class members deprived them of an opportunity to respond to the pre-adverse action notice before adverse action was taken. Relying on the U.S. Supreme Court's opinion in Spokeo v. Robins, the court also refused to certify a class that included class members both with and without Article III standing.3

Culberson v. Walt Disney

Culberson involved allegations similar to those in Branch. Disney "coded" the plaintiffs' background checks as "no hire" based on certain criminal convictions. The plaintiffs alleged that this pre-notice "coding" constituted an adverse action and a "willful" violation of the FCRA. Disney moved for summary judgment following an order certifying the case as a class action.4 Similar to GEICO, Disney argued that its "coding" was not an adverse action itself, but rather only an "internal decision" to potentially take an adverse action in the future. Disney further argued that its alleged conduct (i.e., "coding" prior to sending applicants their reports) was not based on an "objectively unreasonable" FCRA interpretation, and thus the plaintiffs could not prove any willful violation. The court agreed. Relying on the opinion in Lewis v. Southwest, the court held that Disney did not act "objectively unreasonable" even if its FCRA practices were similar to those in recent cases in which courts found non-compliance. As the Culberson court explained, the plaintiffs cannot demonstrate a willful violation by relying on authorities that "were decided years after Plaintiffs applied for employment at Disneyland."


The law in this area is dynamic, and employers should continue to monitor case law and regulatory developments. To mitigate risk, employers should also arrange for a privileged review of their disclosure documents and pre-adverse action notices and procedure. In addition, employers should continue to be mindful of their obligations under expanding state and local ban-the-box laws, which intersect with the FCRA's required processes.5


1 Rod M. Fliegel, Alison S. Hightower & Allen P. Lohse, High Alert for California Employers and Employers Nationwide for the Second Wave of FCRA Class Actions, Littler Insight, (Oct. 19, 2017); Rod M. Fliegel & William J. Simmons, The Swelling Tide of Fair Credit Reporting Act (FCRA) Class Actions: Practical Risk-Mitigating Measures for Employers, Littler Report (Aug. 1, 2014).

2 Littler represents Southwest Airlines in this case. The plaintiff has appealed the court's grant of summary judgment for the airline.

3 Rod M. Fliegel, Philip L. Gordon & Barbara Cusumano, U.S. Supreme Court Holds Not Every Violation of a Federal Statute is a Ticket to File a Federal Court Lawsuit, Littler Insight (May 17, 2016); Rod M. Fliegel & Allen P. Lohse, Ninth Circuit Revisits Article III Standing for an Alleged FCRA Violation, Littler Insight (Aug. 15, 2017).  

4 Rod M. Fliegel, California Court Certifies FCRA Class of Over 40,000 Applicants, Littler Insight (July 17, 2017).

5 See, e.g., Rod M. Fliegel & Molly M. Shah, Ringing in 2018 with New Ban-the-Box Laws, Littler Insight (Jan. 8, 2018); William J. Simmons, Uzo N. Nwonwu & Jason N.W. Plowman, Kansas City, Missouri, Enacts "Ban-the-Box-Plus" Ordinance, Littler ASAP (Feb. 6, 2018).

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Rod M. Fliegel
Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions