Notable Recent Court Cases Pertaining to Background Checks

Posted: August 10, 2021

At Info Cubic, we are constantly monitoring court cases and litigation that are related to the background check industry. Here are a few recent notable court cases:

  • Magruder v. Capital One, Nat’l Ass’n, U.S. Dist D.D.C. Civil Action 19-57 (RDM) – In this case, the Plaintiff determined that credit reports from three major credit reporting agencies (Equifax, Experian, and TransUnion) contained several errors, so he alerted the agencies about the inaccuracies and requested that they be corrected. More than a year passed, and the errors weren’t resolved so the plaintiff filed a lawsuit, alleging FCRA violations for failing to correct a dispute and not providing an update on the status of the disputed debt, among other things. The court ordered the Plaintiff to demonstrate “injury in fact” to establish standing. In response, the Plaintiff alleged that TransUnion caused him “embarrassment, humiliation, and other mental and emotional distress” because of the company’s failure to follow reasonable procedures to assure maximum accuracy (§ 1681e(b)) and failure to conduct a reasonable investigation.” The court ruled on 5/21/2021 that emotional harm was sufficient to result in “standing.”
  • S.A.F.E. Housing Tenant Protections (Ordinance 20-14, Chapter 193), St. Paul, MN. The preliminary injunction was issued on April 19, 2021, by the U.S. District Court for MN to prevented enforcement. The ordinance limited landlords’ ability to consider evictions, credit histories and criminal histories when screening applicants for housing.

  • Arnold, et al. v. DMG Mori USA, Inc., N.D. Cal. Case No. 3:18-cv-02373-JD (Class Action). The disclosure contained state notices (CA, ME, MN, NY, OK, OR, WA) and information about applicant’s right to find out if a report had been run and obtain copy. The court cited similar 9th Circuit cases, Gilberg and Walker, writing: “Our circuit has concluded that substantially similar language, even if presented “in good faith,” is inconsistent with the standalone document requirement.” The court found the defendant’s action “willful,” granted summary judgment on 03/31/2021, and referred case for settlement conference.

  • Bailey and Carrasco Jr v. Romanoff Floor Covering, Inc., E.D. Cal. Case No.2:17-cv-00685 (Class Action). The case involved the alleged misuse of consent forms and improperly running background checks under FCRA; also alleged violation of CA wage and hour law. Significant in that state claim was heard in federal court (bootstrapped to alleged FCRA violation). This case resulted in a $1.375 Million settlement that received final court approval on May 13, 2021.
  • Job Golightly v. Uber Technologies, Inc. et al., 1:2021-cv-03005 (Class Action) with Checkr as Co-Defendant. This case, which was filed on April 8, 2021, is significant because it is one of first-class action cases for independent contractors with 80,000 potential class members. In the case, the Plaintiff alleged the “unlawful use of criminal history to discriminate against its drivers in New York City as well as its brazen noncompliance with human rights and fair credit laws.” There was an alleged violation of FCRA for failure to meet adverse action requirement and an alleged violation of New York law for failure to provide Article 23-A.

  • EEOC v. AscensionPoint Recovery Services, LLC, Civil Action No. 0:21-cv-01428, U.S. District Court for the District of MN. In this case, AscensionPoint requested fingerprinting because of a client’s background check requirements. However, Henry Harrington, the Plaintiff, refused to be fingerprinted based on his religious beliefs but was immediately terminated by AscensionPoint. The case was filed on June 19, 2021, following the failure to reach a pre-litigation settlement through its conciliation process. Italleged a violation of Title VII (Civil Rights Act). “An employee should not have to choose between his faith and his livelihood,” said EEOC Regional Attorney Gregory Gochanour.

For more information on these court cases, or regarding other compliance-related matters, please contact the Info Cubic team at (877) 360-4636.

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