International Foundation
for Cultural Property Protection


District Court Finds Transmitting Background Reports Satisfies FCRA Pre-Adverse Action Obligations

March 15, 2017 12:22 PM | Rob Layne (Administrator)

by Steven C. Millwee, CPP (President and CEO of SecurTest, Inc. and iReviewNow, LLC) 

Federal District Court rules that transmitting background reports, FCRA rights, and pre and post adverse action notices to a candidate by means, such as iReviewNow and mail meets legal obligations. This ruling further validates the revelatory vision behind the iReviewNow patents and intellectual properties.

Under the Fair Credit Reporting Act, when an employer or user of consumer reports, as defined by the FCRA, is considering rejecting a candidate based on a background check (often referred to as a consumer report), it must follow certain “pre-adverse” action procedures.  Specifically, the user must provide the applicant with a copy of his or her background report and a summary of rights under the FCRA, prior to taking “adverse action.”  In Wright v. Lincoln Property Company, the District Court for the Eastern District of Pennsylvania definitively found that an employer is only obligated to send the applicant a copy of these documents; whether the applicant actually receives them is irrelevant. This ruling gives further credence to the three patents of iReviewNow, which electronically delivers the reports, FCRA rights, and notices to candidates. Though this case did not highlight iReviewNow, the ruling validates that iReviewNow patented electronic transmissions meets the FCRA obligations.

Plaintiff Lemuel Wright applied for a job with defendant Lincoln Property Company as a maintenance technician.  In connection with this application, Lincoln procured a background check on Wright.  Lincoln sent Wright an “in progress” copy of the background check that it had obtained from its background check vendor, along with a summary of rights under the FCRA.  According to Lincoln, it sent this background check to the address where Wright lived and received mail at the time of his application.  Wright, on the other hand, argued that the mailing of the background check does not satisfy the FCRA because he never actually received it.

The Court disagreed with Wright, noting that nothing in the text of the FCRA requires companies to ensure that a job applicant actually receives his or her pre-adverse action documentation.  Rather, the statute simply requires the employer to “provide” the information.  In the Court’s view, “[t]here is nothing in the statute” “establishing a requirement that the entity intending to take adverse actions take measures to ensure receipt.”

Despite this ruling, however, the Court denied Lincoln’s motion for summary judgment.  Because the background report that Lincoln sent to Wright was an “in progress” version and not the final version, the Court held that there was an issue of fact as to whether Lincoln satisfied the requirements of the FCRA.  This was the case, in the Court’s view, despite the fact that “[t]here are no material differences between the criminal history included” in the “in-progress” report and the “final” report.

iReviewNow – the new standard

The iReviewNow patents, copyrights, and trade secrets provide one-of-a-kind protections. It notifies the candidate by email and text messaging that his or her background report is ready to be previewed. The “PRE PRE” notice option, unlike a pre adverse action notices, allows candidates to view their background reports, ensure such are accurate and complete, or dispute any inaccuracies before the end-user takes adverse action. iReviewNow also automates the Pre-Adverse and Post Adverse Action steps, which are mandated by the FCRA. iReviewNow patents also allow the user to opt-in to use the EEOC Individualized Assessment Component. This section allows employers and users to consider the candidates explanations about their adverse history, such as criminal convictions, and steps taken to self-rehabilitate.  California recently enacted a law requiring employers to use an Individual Assessment Component, similar to the EEOC guideline.