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From Banking and Finance Law Daily, February 19, 2016

Job applicant waited too long to sue over credit report

By Richard A. Roth, J.D.

The statute of limitations on an unsuccessful job applicant’s Fair Credit Reporting Act claim began to run when he discovered that his credit report had been pulled, not when he learned that the employer’s action was an FCRA violation, according to the U.S. Court of Appeals for the Sixth Circuit. The general rule is that a statute of limitations begins to run when the facts giving rise to a claim are discovered, and the FCRA adheres to that general rule (Rocheleau v. Elder Living Construction, LLC, Feb. 18, 2016, Siler, E.).

Application process. The applicant was seeking a job at Elder Living Construction, which ordered a background screening report from LexisNexis Screening Solutions (the predecessor of First Advantage LSN Screening Solutions). The report attributed four criminal convictions to the applicant.

LexisNexis notified the applicant that it was reporting public record information to Elder Living and, in a second notice, that it was reporting the same information to a second potential employer. A week later, LexisNexis told him that the second employer had decided not to hire him. The applicant also claimed that Elder Living passed the report on to the company where he worked at the time, which then fired him.

All of the notices were received by the end of September 2011. In November 2013, the applicant filed his FCRA suit, claiming that Elder Living had obtained the background report without his consent and without warning him of possible adverse action; that neither Elder Living nor LexisNexis had issued required certifications; and that LexisNexis had violated the FCRA when it released the report.

FCRA time limits. The FCRA sets an alternative statute of limitations. A suit must be filed by the earlier of two years after the violation is discovered or five years after the date of the violation (15 U.S.C. §1681p). The job applicant asserted that the two-year limit began to run not when he discovered that the background report had been ordered but rather when he discovered that doing so was an FCRA violation.

The court disagreed. The usual rule is that a statute of limitations begins to run when the relevant facts are discovered, and there was no reason that rule did not apply to an FCRA suit.

The result might have been different if the applicant had disputed the accuracy of the reported information, the court pointed out, because then the time limit would not have started to run until the statutory dispute resolution process was finished. However, he had never claimed that the report of his criminal record was inaccurate.

The case is No. 15-1588.

Attorneys: Richard Arthur Meier for Richard Rocheleau. Mark R. Richard (Magdich Law) for Elder Living Construction, LLC. Frederick T. Smith (Seyfarth Shaw LLP) for First Advantage LSN Screening Solutions, Inc.

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