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Using References on LinkedIn & Don't Get the Job? Hold Off on that FCRA Claim



Sweet v. LinkedIn Corporation - U.S. District Court for the Northern District of California, San Jose Division


Facts:  Tracy Sweet ("Sweet") submitted her resume to a potential employer through LinkedIn and was invited to interview for the position.  Although she got word that she would be hired, the company called Sweet back and informed her they had changed their mind and would not hire her for the position.  When Sweet questioned what happened, the company told her it had checked some references, and based upon those references, had changed its mind.  Apparently the company had used the Reference Search function on LinkedIn to identify references of Sweet.

Sweet, along with others, brought suit against LinkedIn on the grounds that the Reference Search violated their rights under the Fair Credit Reporting Act ("FCRA"). 

Holding:  The District Court held that LinkedIn's Reference Search is not a consumer report under the FCRA.  The purpose of the FCRA is to protect consumers from the transmission of inaccurate information about them.  To protect consumers, consumer reporting agencies are required to "adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer..."

In this case, the Court noted that LinkedIn allows anyone to sign up, complete a listing of professional and education background information, and create "connections" with other users.  In regard to its Reference Search, LinkedIn allows users to pay a fee to search for references of any LinkedIn member.  The Court pointed to the fact that since LinkedIn created its databases based solely upon information submitted by its account holders, the Court held that it fell outside the FCRA coverage.  As well, the fact that LinkedIn was not alleged to be acting as a consumer reporting agency further doomed the FCRA claim.  

Judgment:  The District Court dismissed the FCRA claims brought by Sweet and others on the grounds that the LinkedIn was not acting as a consumer reporting agency and and Reference Search function provided by LinkedIn was not a consumer report within the meaning provided by the FCRA. 

The Takeaway:  For employers, I would consider this case to be somewhat of a relief.  Of course there are always some concerns with using social media for background checks, but this case demonstrates that information that comes directly from the account holder does not necessarily involve issues with the FCRA.

Majority Opinion Judge:  Judge Grewal 

Date:  April 14, 2015 

Opinion:  https://app.box.com/s/uxpuxwbm6bjsd7ssjzhzc58nrxn0oysk

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