Blogs

INDUSTRY NEWS

Court rules FCRA protections for consumer reports do not extend to independent contractors

The decision provides further insight for employers and background screening companies on background screening for independent contractors – an issue which has previously lacked clear guidance.

The plaintiff in the case claimed he applied to contract with a company as an insurance salesperson but was not hired due to a falsely reported felony on his background check. What’s more, the plaintiff claims the company failed to provide him with a pre-adverse action letter and a copy of his background check, as required by the federal Fair Credit Reporting Act (FCRA).

The company, however, moved to dismiss the claim on the basis that the plaintiff was only applying to work as a contractor and thus the FCRA’s pre-adverse action notice requirement did not apply.

Still, the plaintiff claimed that he was, in fact, applying as an employee and that even if he was a contractor, the FCRA’s requirements would still apply.

Ultimately, the judge cited the FCRA’s plain language stating that the statute was limited to reports used for “evaluating a consumer … as an employee” to decide that the “the FCRA’s requirement of pre-adverse action notice only applies when an applicant applies to be an employee."

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.

While this decision becomes part of a small but growing body of law providing clarity on this recurring issue, it is important to note that this is only one court’s opinion. As a best practice and until more courts opine on this matter, we will continue to follow the FTC’s opinion that independent contractors fall under the gambit of “employment” for purposes of the FCRA.

Source: Troutman Sanders LLP, 12/13/2018

Sending...
Thank you for your interest in Business Information Group. We have received your message and will contact you in one business day or less.
Something went wrong.Try again
You have exceeded the number of attempts to submit this form. As a result, your IP address has been temporarily blocked.
Something went wrong.Try again

Get In Touch

Send a Message *fields required

What are your Interests?optional

Even our RFP PROCESS is state-of-the-art.

Find out why
RFP Kit

What Our Clients Are Saying

The service you provide at Truescreen has been the best I have ever seen in comparison to other vendors I have worked with in the past! You guys rock!

Talent Acquisition Specialist
Retail Store Chain

I am very impressed with your company’s customer service, and the Truescreen portal seems to be an intuitive, user-friendly design.

Learning Coordinator
Public College

Our team loves working with Truescreen and the expedient, thorough service and results we get from you.

Human Resources Executive
Large Hotel Chain

I appreciate all your hard work ensuring that individuals are cleared through our processes. Truescreen makes my job so much easier and less stressful.

Human Resources Analyst
Large Academic Institution
Sending...
Thank you for your interest in Truescreen. We have received your message and will contact you within one business day.
Our apologies, there was an error processing your request.  Please resubmit your message or contact us at 888-276-8518.
You have exceeded the number of attempts to submit this form. As a result, your IP address has been temporarily blocked.
Our apologies, there was an error processing your request.  Please resubmit your message or contact us at 888-276-8518.

Get In Touch

Contact Us *fields required

What are your Interests?optional

You are leaving Truescreen.com

Ok, Continue Cancel

×
×