Recent Surge of FCRA Employment Lawsuits

The Fair Credit Reporting Act (FCRA) requires employers to take important compliance steps before obtaining and using consumer reports to make employment-related decisions such as hiring, promotion, and termination. Consumer reports include, but are not limited to, criminal records, motor vehicle reports, credit checks, reference checks, education verification, employment verification, and professional license or certification verification.

Recently, the number of FCRA lawsuits has significantly increased. There were 1,940 FCRA lawsuits filed in 2011; 2,223 filed in 2012; 2,289 filed in 2013; and 2,327 filed in 2014. As of Sept. 30, 2015, 2,446 FCRA lawsuits have been filed.

The growing popularity of FCRA employment lawsuits is not surprising. The overtly plaintiff-friendly law is riddled with perplexing, technical obligations for employers. Moreover, the FCRA offers plaintiffs potential actual or statutory damages, as well as the ability to recover costs, attorneys’ fees, and punitive damages. A plaintiff may allege that a defendant negligently or willfully violated the FCRA. A plaintiff alleging a negligent violation is limited to recovering actual damages, which compensate for the harm, loss, or injury actually suffered by the plaintiff. A plaintiff alleging a willful violation may recover either actual damages or statutory damages of $100 to $1,000 per violation.

Notably, plaintiffs who plead a willful violation may recover statutory damages without ever having to prove harm, loss, or injury suffered. As FCRA violations are highly technical in nature, proving harm, loss, or injury is difficult for the majority of plaintiffs. We will discuss how these unharmed plaintiffs have insinuated themselves into federal courts later on.

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