Michigan Background Check Laws

Smith v. LexisNexis Screening Solutions (2016)

What standard of care must a CRA apply when preparing consumer reports to stay compliant with the FCRA? The FCRA requires that a CRA must “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” The Court does not clearly define this standard. However, they were clear in stating that the difficulty a CRA faces when presented with numerous discrepancies does not excuse them from not investigating those discrepancies.

The Court found in favor of Smith. LexisNexis Screening Solutions reported criminal history information for a David Oscar Smith when the applicant’s name was David Alan Smith. This resulted in a six week delay of David Alan Smith’s hire. The Court found that LexisNexis was negligent and did not meet the standard of care as required by the FCRA to ensure maximum possible accuracy. The Court found that LexisNexis should have performed further investigation on such a common name. The Court notes that “individuals with common names carry a higher risk that information belonging to others with the same name will be mistakenly attributed to them, and that a reasonable person would take steps to reduce that risk.”

The standard of care required by the FCRA that CRA’s must take to ensure that they have “reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates” in place is high. Although it is common for CRAs to receive numerous discrepancies when performing a background screening, the burden of investigating these discrepancies to ensure the information received belongs to the applicant does not excuse a CRA from doing so. CRA’s must investigate these discrepancies using the highest standard.

Hillson v. Kelly Services Inc

Plaintiff claims that Kelly Services did not use a disclosure consisting solely of the disclosure. It also included liability waiver language.

Settlement for $6.7M. Hillson was the lead plaintiff for this class action lawsuit.

Employers must ensure that their disclosure form consists solely of the disclosure as required by the FCRA.

Rocheleau v. Elder Living Construction

Plaintiff claims that Elder Living obtained the background report without first obtaining his permission or notifying him that adverse action may result. He further alleges that neither First Advantage nor Elder Living issued certain certifications mandated by statute. Finally, he contends that First Advantage failed to adhere to the required “strict procedures” in releasing his information.

Court found in favor of Elder Living Construction. Proper adverse action procedures were followed, and plaintiff is time-barred because this occurred more than two years from filing date.

This is a good example of the importance for employers and CRAs in following proper adverse action procedures. Not only did the defendants follow proper 613 procedures for notification, they also allowed the plaintiff the option to correct inaccuracies (which he opted not to do).