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California Class Action Suit Alleges LinkedIn Violated Fair Credit Reporting Act (FCRA) By Providing Employers With Reference Reports

Another interesting case filed in California recently highlights the myriad risks employers face when using social media as part of their hiring process.

A class action lawsuit was filed in the Central District of California against LinkedIn based on allegations that the reference reports LinkedIn generates for premium subscribers, including many employers, violate the Fair Credit Reporting Act (“FCRA”). According to the plaintiffs in Sweet, et. al. v. LinkedIn Corporation, an employer who is a premium subscriber can generate a report containing the names, locations, employment areas, current employers, and current positions of all persons in a user’s network who may have worked with a job applicant and also contact the applicant’s “references.” An employer, according to the allegations, can run such a “reference report” on a job applicant without the applicant receiving any notification whatsoever. Thus, as the complaint alleges, “any potential employer can anonymously dig into the employment history of any LinkedIn member, and make hiring and firing decisions based upon the information they gather, without the knowledge of the member, and without any safeguards in place as to the accuracy of the information that the potential employer has obtained.” The complaint claims this activity potentially violates both the FCRA’s purposes, which include safeguards as to the accuracy, fairness, and privacy of the information that a potential employer obtains, and the FCRA’s customer notification requirements.

This latest lawsuit against LinkedIn serves as another example of the complex legal issues and risks that an employer faces when using social media to make recruiting and hiring decisions.

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume IV, Number 296
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About this Author

Alexander Nestor, Employment litigation Attorney, Allen Matkins Law Firm
Partner

Alexander Nestor is a partner in San Francisco and is a member of the Labor and Employment Practice Group. Alex represents employers in litigation proceedings in state and federal court, in arbitration, and before administrative agencies on a broad range of employment issues, including discrimination, sexual harassment, retaliation, wrongful discharge, defamation, wage and hour, trade secret misappropriation, and unfair competition claims. He represents employers in individual, multi-party and class action employment litigation.

Alex also regularly counsels and assists employers in...

415-273-8411
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