Job Seekers Sue LinkedIn for Violating Fair Credit Act

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Nov 18, 2014

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According to the New York Times, a group of job seekers have sued LinkedIn, saying that it enables reference checks that may be based on inaccurate information.

The case of Sweet v. LinkedIn was filed in federal district court in Northern California in October.

A Withdrawn Job Offer

According to the complaint, plaintiff Tracee Sweet found a job opening in the hospitality industry on LinkedIn in July of 2014. She applied and received a notification that the general manager of a potential employer had viewed her LinkedIn profile.

After Sweet was interviewed by the general manager, she was told that she was going to be hired. Shortly after that, the company told her it had changed its mind. The general manager told Sweet that he had checked some references for her and withdrew the offer on that basis.

Since Sweet didn’t provide references directly, she apparently assumed the company found them via LinkedIn’s “Reference Search” service.

The other three named plaintiffs also applied for jobs using LinkedIn and were not offered them. The complaint doesn’t directly allege that their references were checked via LinkedIn or that they were denied employment based on these references.

LinkedIn’s Reference Search

Reference Search allows paying LinkedIn members to “[g]et a list of people in your network who can provide a reference for someone you are interested in.” The service lists people employed by the same employer as a job applicant during the same time period.

LinkedIn members aren’t notified when someone runs a Reference Search on them. Also, LinkedIn has no way of knowing whether the people employed at the same time actually knew the applicant.

According to the complaint,

“any potential employer can anonymously dig into the employment history of any LinkedIn member, and make hiring and firing decisions based upon the information they gather, without the knowledge of the member, and without any safeguards in place as to the accuracy of the information that the potential employer has obtained”

The complaint alleges that this “secrecy in dealing with consumer information” violates the purposes of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq.

The Fair Credit Reporting Act

The FCRA, enacted in 1970, is targeted at the misuse of consumer information. It requires that “consumer reporting agencies” follow “reasonable procedures” to protect the confidentiality and accuracy of consumer credit and other information.

The Act defines “consumer reporting agency” to include a company that:

“regularly engages … in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties…”

(Emphasis added.)

The Act defines a “consumer report” to include:

“any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for—

(B) employment purposes;…”

(Emphasis added.)

According to the complaint, LinkedIn violates the FCRA as follows:

“In essence, LinkedIn has created a marketplace in consumer employment information, where it sells employment information, that may or may not be accurate, and that it has obtained in part from unwitting members, and without complying with the FCRA. In turn, potential employers, among others, obtain that information from LinkedIn, and may make hiring and firing decisions utilizing said information, among other things, without providing notice to the persons whose information they have obtained, and without themselves complying with the FCRA. And all of this goes on without the knowledge of the member whose information is being disseminated.

The attorney for the plaintiffs is seeking class action status for the suit. The proposed class would be:

“All persons in the United States who, in the two years prior to the filing of this Complaint, had a Reference Report run on them that was initiated through LinkedIn’s “search for references” functionality.

Will the Plaintiffs Succeed?

An employment commentator with Forbes suggested that the case had no merit:

“Part of the plaintiffs’ argument hinges on the notion that the information that Reference Search provides is private. It’s simply not. Members freely post their job history on line. In fact a Reference Search is really just a shortcut to research I could do myself.

Regardless of whether the plaintiffs succeed, the case is a reminder that in the Internet age employers routinely search social media for information about applicants, and this information may or may not be accurate or favorable.

As the Forbes writer commented,

“Many of us may have past colleagues who don’t like us. There’s not much we can do about that now or before the Web existed.

If you feel that you’ve been discriminated against in a hiring situation, you may wish to consult an employment attorney in your area.

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