There is a continuation of class action lawsuits going against employers and background check firms that claim alleged violations of the federal Fair Credit Reporting Act (FCRA) in 2020. This is despite the ruling against Spokeo v. Robins by the Supreme Court that led to some cases being dismissed.

Spokeo, Inc. v. Robins was a United States Supreme Court case decided in May 2016, in which the Court vacated and remanded a ruling by United States Court of Appeals for the Ninth Circuit on the basis that the Ninth Circuit had not properly determined whether the plaintiff has suffered an "injury-in-fact" when analyzing whether he had standing to bring his case in federal court.

A national policy resource center compiled an examination of 146 successful FCRA class action lawsuits. They found that employers have paid out approximately $174 million over the past decade to settle claims they violated according to the FCRA. According to background check firms that provide background checks about job applicants to employers, reports that employers have paid out another $152 million when sued directly under the FCRA . Class action lawsuits that claim violations of the FCRA, including small technical violations of statute are costing employers big time.

In just 2018 and 2019, The employers such as: 7-Eleven paid $1.9 million, Delta Air Lines paid $2.3 million, Omincare paid $1.3 million, a subsidiary of PepsiCo paid $1.2 million and Frito-Lay Inc. paid 2.4 million to settle the class action lawsuits over alleged violations of the FCRA.

Consumer Reporting Agencies (CRAs) such as TransUnion, Equifax, and Experian - who are background check providers - also had to pay out money due to these FCRA lawsuits. A government agency that enforces the FCRA - the Consumer Financial Bureau (CFPB) - required a CRA to pay $8.5 million to resolve an FCRA lawsuit, while a federal judge in Florida approved a $3.6 million settlement in a FCRA class action lawsuit that was filed against another CRA.

The Supreme Court ruling in May 2016, Spokeo v. Robins, caused some FCRA class action lawsuits to be dismissed or decertified. One example includes a man who filed a lawsuit when he found that a “people search website” obtained inaccurate information about him. Found consumers must prove that there is “an injury in fact” in lawsuits for alleged “bare” violations of federal statures to establish standing under Article III of the United States Constitution.

In the Spokeo case, the Supreme Courts decision did not allow employers to relax their obligations or ignore the technicalities of the FCRA. Employers must always ensure that they are compliant with the obligations stated by the FCRA and must work with background check providers that understand the FCRA inside and out.

Employers and CRA’s are encouraged to use Employment Screening Resources (ESR) that offer two complimentary white papers (a government or other authoritative report giving information or proposals on an issue) that include: “Common Ways Prospective or Current Employees Sue Employers Under the FCRA” and “Common Ways Consumer Reporting Agencies are Sued Under the FCRA” These closely examine the many causes that can lead to lawsuits and shows employers and CRA’s that they work with can avoid a costly litigation.