The following post is from CAI’s Kevin von der Lippe. He serves as CAI’s private investigator and leads the company’s Background Checking department.
Often, clients hear me talking about the pitfalls of not staying compliant with the nitpicky rules of the federal Fair Credit Reporting Act (FCRA). Or, they hear me cautioning against transgression of Title VII of the Civil Rights Act of 1964, and how the onerous Equal Employment Opportunity Commission (EEOC) is in their enforcement. Sometimes I feel like I am selling fear, but the reality is, the litigation is real, the liability for your company is real, and the long term consequences for non-compliance can be devastating to your company.
The view from today’s perspective is that there is a sea of class action lawsuits over small, technical flaws with the paperwork required under the FCRA. In particular, the two main points of contention are: proper release from your applicant or employee, and sending out the proper paperwork (or even any paperwork) before you make your adverse employment action based upon the background check.
The problem stems from an infamous $22 million settlement on the East Coast in 2008. This particular case showed that suing companies who fail to comply with the FCRA could be lucrative. In 2009, the Sixth Circuit ruled that a plaintiff did not have to show actual damages because the fact that the company failed to comply with the FCRA was in-of-itself an “injury” to the plaintiff, thus giving him justification in filing his suit. 
In February 2014, the U.S. Court of Appeals for the Ninth Circuit (in California) ruled that “a plaintiff can suffer a violation of the statutory right without suffering actual damages.”  Contrary to rulings from other circuits, this reignited a firestorm and on April 27, 2015, the argument made its way to the nation’s highest court. While the Supreme Court’s decision has not yet been made, the ruling could change Congress’ role in defining how these cases move forward, and perhaps even reduce the number of class action lawsuits that are based solely on technical flaws.
The good news is, you can reduce your exposure under the FCRA by keeping up with the necessary paperwork. CAI provides samples of the necessary documents on our website, www.capital.org/vea. We also provide the necessary FCRA paperwork with every report issued by our background checking department.
If you have questions about our background checking services, or how CAI can help you remain in compliance with the federal laws related to background screening, please do not hesitate to contact Kevin W. von der Lippe at (336) 899-1150 or by e-mail at firstname.lastname@example.org.
Capital Associated Industries Services Corporation is a licensed investigative agency, specializing in corporate pre-employment background screening. Our corporate agency license is BPN 001473P11.
 Beaudry v. TeleCheck Services, Inc., (6th Cir. 2009).
 Thomas Robins v. Spokeo, Inc. (9th Cir. 2010)