Background Screening Class Certified in Obsolete Information Case

On July 26, a Northern District of California judge certified a class of applicants who claimed that S2Verify, a background check company, included obsolete criminal information on their background reports in violation of the Fair Credit Reporting Act. In certifying the class, the Court found that the alleged harm was sufficient under the U.S. Supreme Court’s ruling in Spokeo.

Plaintiff filed the proposed class action alleging that the background report provided to his prospective employer included past arrests that did not result in a conviction that were older than seven years, in violation of 15 U.S.C. § 1681c(a)(2). Plaintiff claimed that as a result of the obsolete information included in the report, he was denied employment with the company where he applied to be a security guard.

During discovery, S2Verify admitted that during the time frame at issue, it made exceptions to the FCRA prohibition on reporting obsolete information for clients who were placing employees in “sensitive” positions by giving those clients access to the stale data until March 2014. While the FCRA allows this type of “obsolete information” to be included where a consumer report is prepared in connection with “the employment of any individual at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more,” there is no exception provided based on the type of position for which an employee applies.

The Court certified the class finding that the lawsuit met the numerosity, commonality, typicality, and adequacy requirements for granting class certification. The Court also ruled that the claim asserted by Plaintiff satisfied the concreteness test for purposes of standing since he was able to demonstrate that S2Verify “sent restricted information about plaintiff into the world and as such caused injury to plaintiff’s privacy interest.”

The national class of approximately 4,500 includes individuals who were the subject of an S2Verify report for nine different companies from June 2013 through February 2014 and whose reports included any arrests, charges, or indictment information that did not result in a conviction that were older than seven years.