N.D. Cal. Judge Puts a Check on Plaintiff’s Novel LinkedIn Background Check Theory Under FCRA

The federal Fair Credit Reporting Act (FCRA) has recently spawned an unprecedented number of class action complaints against employers for allegedly failing to comply with FCRA’s hyper-technical disclosure and consent requirements before conducting background checks or proceeding with “adverse actions.” As these cases have evolved, plaintiffs have expanded their focus beyond traditional background checks and have started attacking employers’ use of ever-evolving technologies, like social media accounts, that are often accessible and searchable through just a few clicks of a mouse.

The law, like the technology, is still developing, which leaves employers without much guidance to determine what they can and cannot do to hire and retain a reliable and trustworthy workforce. But a federal judge in California’s Northern District has recently shed at least some light on the limits of FCRA and plaintiffs’ novel theories.

In Tracee Sweet, et al. v. LinkedIn Corp., Case No. 3:14-cv-04531, the plaintiffs alleged that LinkedIn violates FCRA by providing members of its professional networking site with potential reference contacts for job candidates. Unbeknownst to many of its individual users, LinkedIn offers a “reference search” tool that provides users who pay a fee with a list of an individual’s current and former employers, as well as a list of other LinkedIn members who are in the same network as the searcher and who may have worked at the same company during the same period as the individual. The plaintiffs claimed that they were rejected for jobs due to information gleaned from references obtained through LinkedIn.

The court dismissed the complaint after concluding that the reference search does not constitute a consumer report and LinkedIn is not a consumer reporting agency. The court reasoned that plaintiffs volunteered their employment history precisely so that LinkedIn would publish it to the public online and accomplish the individual’s “information-sharing objective.” Moreover, the reference search does not bear on an individual’s character, nor could a person’s character be inferred based on the caliber of the references provided. Although the court’s decision allowed for an opportunity to amend the lawsuit to correct these defects, the plaintiffs failed to do so and the case is now closed.

While this decision may signify a glimmer of hope in recent case law trends, the law is still evolving. Employers should remain cautious when using information obtained from internet searches or through social media when making employment decisions and consult with counsel regarding any necessary steps for compliance with the FCRA and state law counterparts.