Earlier this month, Sprint settled, on an individual basis, a proposed FCRA class action accusing the telecommunications provider of asking consumers to waive privacy rights in its consumer disclosure forms.
Specifically, the plaintiff claimed that the disclosure form Sprint used was not in a document that "consists solely of the disclosure" as required under 15 U.S.C. § 1681b(b)(2)(A). The plaintiff alleged that the form included extraneous information, including blanket authorizations whereby the applicant authorized the release of "any information related to my previous employment, results of any pre-employment drug screening test, criminal convictions, education, driving records, residences, or character." In addition, the form allegedly included that the authorization would serve as the applicant's authorization "to any persons, companies, government agencies, or other entities to furnish Sprint any and all such information pertaining to me that might be in their possession." The authorization also required the applicant to authorize the Social Security Administration to "release information regarding [his] social security number and information regarding [his] identity to Sprint," to agree to furnish any additional information necessary to complete the background investigations, and also agree to submit to a drug screen.
Sprint filed a motion to dismiss after its offer of judgment for statutory damages was not accepted. Sprint argued that in light of the plaintiff's failure to plead actual damages, its offer of judgment offered the plaintiff full satisfaction of his claim. Sprint also asked the court to stay the action pending the outcome in Campbell-Ewald Co. v. Gomez. The court declined to do so, and in the following weeks, after the decision from the United States Supreme Court in Campbell-Ewald, Sprint abandoned its argument.
However, Sprint still maintained that dismissal for lack of subject matter jurisdiction was appropriate. The court disagreed, denying Sprint's motion to dismiss and noting that in enacting the FCRA, "Congress identified individual interests that the increased use of credit reporting agencies stood to jeopardize, namely, interests in privacy and economic self-determination. When Congress created individual, enforceable statutory rights in the FCRA, it 'elevat[ed] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.'"
The court ultimately denied Sprint's motion to dismiss. The parties reached an individual settlement agreement, and the plaintiff dismissed the case against Sprint. This case serves as yet another example of the importance of employers ensuring that they are using FCRA-compliant forms in their employment application process. Claims under § 1681b(b)(2)(A) are regularly litigated and apply to employers of all sizes.
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