`

7th Circuit reverses employment claim jurisdiction dismissal

August 30, 2018

After a woman failed to receive a report as to why her job offer was rescinded, the 7th Circuit Court of Appeals reversed a district court’s dismissal of her adverse-action claim for lack of jurisdiction.

Allied Solutions, LLC offered Shameca Robertson a job, but rescinded the offer after it ran a background check before Robertson reported to work. The report revealed certain “non‐conviction information” about Robertson, who alleged she was told the offer was rescinded “because of information in her ‘criminal background check’ report.” She was not offered any more reason as to why.

Under the Fair Credit Reporting Act, Allied was required to alert Robertson clearly and conspicuously of its intent to obtain the report in writing, unadorned by any additional information, securing her consent.

Roberston argued that the forms she received were neither clear nor conspicuous, and included extraneous information. She also contended that her offer was rescinded before she was supplied with a copy of the report or a written summary of her FCRA rights.

Both parties reached a tentative settlement agreement in April 2016. Several months later, the 7th Circuit ruled in Groshek v. Time Warner Cable, Inc., 865 F.3d 884 (7th Cir. 2017), that an injury functionally indistinguishable from the one underpinning Robertson’s notice claim was not concrete and did not confer standing. The district court then ordered Robertson to show cause why her case should not be dismissed for the same reason.

Shameca Robertson v. Allied Solutions, LLC, 17-3196, was eventually dismissed for lack of standing, and Robertson was refused to amend her complaint because she never indicated what facts she could allege that would support jurisdiction.

On appeal, Robertson challenged that by withholding her background report, Allied limited her ability to review the basis of the adverse employment decision and impeded her opportunity to respond. She contended the ability to respond was the substantive purpose for which the Act compels employee disclosure.  

Section 1681b(b)(3)(A) of the FCRA provides that before taking adverse action, the person intending to take such adverse action should provide to the consumer to whom the report relates: “(i) a copy of the report; and (ii) a description in writing of the rights of the consumer under this subchapter.”

With that knowledge, the 7th Circuit found that Robertson’s injury was “concrete and particular to her” and that the remaining criteria for standing, causation and redressability, were also present. The court held that Robertson adequately alleged that what Allied divulged was insufficient under the act.

“Only subpart (A) compels disclosure of the report itself, and that provision requires disclosure prior to any adverse action,” Chief Judge Diane Wood wrote. “This unique pre‐adverse action requirement assures that the applicant will have a chance to review the actual document on which the employer relied, and that she can do so with time to respond to unfavorable information.”

“Because the alleged injury is concrete and Robertson otherwise alleged enough to support her Article III standing on her adverse‐action claim, we reverse the judgment of the district court dismissing that claim for lack of standing and remand for further proceedings,” Wood concluded.

ADVERTISEMENT

Recent Articles by Katie Stancombe