Fair Credit Reporting Act Gets a Vote of Confidence in Pennsylvania

Angela Preston

The Eastern District of Pennsylvania has ruled that Section 1681c of the Fair Credit Reporting Act (FCRA) is not an unconstitutional restriction of free speech.  The case, King v. General Information Services, Inc., Case No. 10-6850 (E.D. of Penn.), upholds the enforceability of FCRA Section 1681c, which requires accuracy and bars disclosure of potential adverse information after a defined period of time. The defendant in the case, a consumer reporting agency conducting background checks, argued that this section of the FCRA was an unconstitutional restriction on free speech. The Court disagreed, saying that 1681c embodies Congress’ dual interests in meeting business needs and protecting consumer privacy. “By barring consumer reporting agencies from disclosing adverse pieces of information after a certain period of time, section 1681c directly advances the governmental interest in protecting individuals’ privacy in potentially harmful and embarrassing information”.

So when it comes to reporting out-of-date arrest information on a background check, free speech is not a defense.  Makes sense, right? I think so. GIS had argued that Section 1681c was unconstitutional in light of a recent Supreme Court case, Sorrell v. IMS Health, Inc., 131 S. Ct. 2653 (2011), which struck down a Vermont law on First Amendment grounds because that law had speaker-based and content-based restrictions.  GIS unsuccessfully argued that Section 1681c was overly restrictive by limiting speech about arrest records– speech that it claimed was subject to a stricter level of protection under Sorrell.

The King court disagreed, finding that CRAs have a unique impact on personal privacy, compiling otherwise publicly available information in a single source. This practice is a form of commercial speech that is much different from when the information is publicly available in many sources, as evidenced by the fact that employers are willing to pay for consumer reports.

This court shut the door on the argument that consumer reports should be protected as free speech, even though the reports are comprised of public record. Nice try, GIS. It was a stretch, in my opinion. But now we know how at least one court interprets the question.

 

Angela Preston
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Angela Preston

Vice President of Compliance & General Counsel at EmployeeScreenIQ
Angela Preston has more than 20 years as a licensed attorney and over 10 years in the background screening area. She serves on the Board of Directors of the National Association of Professional Background Screeners (NAPBS), is a member of the NAPBS Background Screening Credentialing Council (BSCC), and is actively involved in the Society for Human Resource Management (SHRM) and ASIS International. Angela is also a member of the Ohio State and Columbus Bar Associations. Angela has direct oversight and management of compliance programs, and will provide guidance in complex legal matters including state and federal legislation, EEO law, client education, adjudication, pre/adverse action process, NAPBS Accreditation and client and vendor contract management.
Angela Preston
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