New Litigation May Further Clarify the FCRA’s Definition of “Consumer Reporting Agency”
Time 4 Minute Read
New Litigation May Further Clarify the FCRA’s Definition of “Consumer Reporting Agency”

An employer’s obligations under the Fair Credit Reporting Act (“FCRA”) are triggered when it obtains a “consumer report” from a “consumer reporting agency” for use in making an employment decision. A federal court in the Middle District of Florida is set to rule on a summary judgment motion clarifying whether a business that transmits public records unaltered to a prospective employer is a “consumer reporting agency”.

In Lyttle v. Trulieve, Inc., et al., 8:19-cv-02313 (M.D. Fla.), Trulieve hired the firm Personal Security Concepts to obtain public records of applicants from two Florida state agencies and retransmit those public records in unaltered form back to Trulieve for review. The plaintiff was an applicant offered conditional employment that was later rescinded after Trulieve received these public records.  Plaintiff claims that in doing so, Trulieve used “consumer reports” in making an employment decision without securing his prior approval as required by the FCRA. Plaintiff seeks to bring claims on behalf of himself and a class of similarly situated individuals.

Last week, Trulieve filed a motion for summary judgment asking the court to dismiss the suit because Personal Security Concepts is not a “consumer reporting agency,” as defined by the FCRA, as a matter of law.

Trulieve argues that “the mere receipt and retransmission of information does not fall within the ambit of the FCRA.” Trulieve cites Eleventh Circuit precedent that narrowly defines consumer reporting agencies, implying “a function which involves more than receipt and retransmission of information”. In Smith v. First Nat. Bank of Atlanta, 837 F.2d 1575, 1579 (11th Cir. 1988), the court narrowly defined consumer reporting agencies as those that “assemble or evaluate consumer credit information.”Therefore, Trulieve argues that when Personal Security Concepts merely received the public records from state agencies and forwarded the entire documents in raw unedited form to Trulieve, it did not act as a consumer reporting agency because it did not “evaluate, reassemble, regroup, compile, partition, or otherwise customize the public information”. Personal Security Concepts does not maintain a database with this information, nor does it in any way alter the reports before forwarding them over to Trulieve.

Trulieve also argues that it could have obtained the exact same public records in the exact same form directly from the state agencies themselves.  In Alexander v. Sonny’s Real Pit Bar-B-Q, 701 Fed. Appx. 931, 937 n.5 (11th Cir. 2017), the Eleventh Circuit noted that the defendants could not have violated the FCRA by accessing a criminal record made available on a county website because the County is not a consumer reporting agency and accordingly the criminal record cannot qualify as a consumer report. Because the Florida Department of Law Enforcement and Florida Department of Highway Safety and Motor Vehicles are not consumer reporting agencies, Personal Security Concepts should not be either “merely because it acted as a conduit to forward unassembled, unaltered and unevaluated” raw public records to Trulieve.

Finally, Trulieve notes that under the FCRA, consumer reporting agencies must “regularly engage” in assembling or evaluating consumer information. Personal Security Concepts did not assemble or analyze the public records, but merely retransmitted them to Trulieve and therefore do not satisfy the definition of consumer reporting agency.

Because there is no factual dispute over the contents of what Personal Security Services transmitted to Trulieve and the only dispute is over the import of the retransmission of the public records, Trulieve asks the court to decide whether Personal Security Services is a consumer reporting agency as a matter of law. Trulieve cites Rush v. Macy’s New York, Inc., 775 F.2d 1554, 1557 (11th Cir. 1985), where the court affirmed an order granting a motion to dismiss because the defendant could not be held liable for an FCRA violation when no consumer report or reporting agency was involved, to bolster the argument that the claims against Trulieve cannot proceed if Personal Credit Services is not a consumer reporting agency.

The Court’s ruling on this motion may help clarify the definition of a consumer reporting agency under the FCRA.  That clarification would materially impact the efforts of both employers and background check vendors in collecting and assessing background information as part of the hiring process.

  • Partner

    Bob litigates complex employment, labor and business disputes. Bob is a litigator who represents businesses in resolving their complex labor, employment, trade secret, non-compete and related commercial disputes. He is ...


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