Summary: The Plaintiff was employed by the Defendant between June 2015 and Feb. 2018. Plaintiff signed an agreement to arbitrate disputes as part of her employment contract when she was hired. The arbitration agreement by its terms covered any controversy between Plaintiff and Defendant arising out of Plaintiff's employment or the termination of Plaintiff's employment, including those arising under the Fair Credit Reporting Act. After her employment ended, Plaintiff brought a putative class action lawsuit alleging the Defendant conducted background checks during the hiring process without making proper disclosures. Defendant moved to compel arbitration including Plaintiff's FCRA claims. Plaintiff argued her FCRA claims should not be subject to the Arbitration Agreement because they may have taken place prior to the arbitration agreement being executed. Plaintiff argued specifically that because neither side presented evidence of when the background check was conducted, the Court should assume it was performed before she signed the arbitration agreement. Plaintiff further argued that the Arbitration Agreement could not be applied retroactively to these claims because the agreement did not unambiguously state it has retroactive effect.
The Court disagreed with Plaintiff's theory and granted the Defendant's Motion to Compel Arbitration. In doing so the Court held, "the Court need not decide when a FCRA cause of action accrues, because Plaintiff expressly agreed to arbitrate all disputes, 'including but not limited to those arising out of federal and state statutes and local ordinances, such as ... the Fair Credit Reporting Act' [emphasis added] at the time she signed the Arbitration Agreement. Whether Plaintiff knew that any such claim had accrued at that time is irrelevant, because the Agreement is not limited to claims that have not yet accrued."
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| Impact(s): FCRA compliance – for general legal review |
Summary: A federal court held that the protections applicable when consumer reports are obtained for "employment purposes" under the Fair Credit Reporting Act (FCRA) do not extend to reports obtained for independent contractors. Plaintiff had applied to contract with the Defendant as an insurance salesperson. The court found that the FCRA's language is limited to evaluating a consumer as an employee, and does not apply to independent contractors.
While the FCRA does not directly address independent contractors, the Federal Trade Commission (FTC) previously issued two advisory opinions stating that independent contractors should be afforded the same rights as employees. The FTC also reiterated this view in its staff report published in July 2011, stating that the FCRA's broad definition of the term "employment purposes" extends beyond traditional employment relationships.
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| Impact(s): FCRA compliance – for general legal review |
