3rd Circ. Breathes New Life Into Job Applicants’ SEPTA Suit

Law360 Vin Gurrieri
September 10, 2018

Workers alleging they were improperly denied jobs due to the results of pre-employment background checks have standing to sue the Southeastern Pennsylvania Transportation Authority under the Fair Credit Reporting Act for not providing them a copy of the reports before turning them down for jobs, the Third Circuit ruled Monday.

In a precedential ruling, a three-judge panel upheld part of U.S. District Judge Petrese B. Tucker’s April 2017 decision tossing an allegation that SEPTA failed to properly inform a trio of would-be SEPTA employees of their FCRA rights when they weren’t hired because of prior drug convictions, but said the judge incorrectly dismissed their claims based on SEPTA’s failure to give them copies of their consumer reports.

The panel said that under the FCRA, SEPTA was required to meet advance-notification requirements before it could deny the applicants jobs and that the applicants have standing to assert their first claim that SEPTA failed to provide copies of their consumer reports. ”

This right permits individuals to know beforehand when their consumer reports might be used against them, and creates the possibility for the consumer to respond to inaccurate or negative information either in the current job application process, or going forward in other job applications, ” the panel said.

The suit against SEPTA was initially filed in April 2016 by named plaintiff Frank Long, who was later joined by plaintiffs Michael White and Joseph Shipley on behalf of themselves and a putative class of SEPTA job applicants. All three named plaintiffs had been convicted of drug offenses at various times ranging from the late 1990s to the early-to-mid 2000s, according to court documents.

Around 2014 and 2015, they each applied to work at SEPTA in jobs that involved operating vehicles. As part of the application process, they each filled out paperwork disclosing their criminal history, giving SEPTA authorization to run background checks, according to the applicants’ court filings.

SEPTA ultimately declined to hire any of the three men because of their criminal histories as their drug convictions ran afoul of SEPTA’s hiring policies, prompting the applicants’ lawsuit.

Ruling in SEPTA’s favor to dismiss the case, Judge Tucker had held that the applicants lacked standing and that they didn’t plead a concrete injury to be able to assert an FCRA claim. Instead, the judge concluded that the applicants pled only bare procedural violations ” of the FCRA and that they weren’t harmed by those purported violations, according to the ruling.

In Monday’s ruling, the panel noted that SEPTA didn’t send the three applicants copies of their background checks before it decided not to hire them or notices of their rights under the FCRA, which requires employers to send both before they take an adverse employment action against applicants.

But citing the U.S. Supreme Court’s Spokeo Inc. v. Robins ruling, which held that workers must suffer concrete ” and particular ” injuries before they sue, the panel said the applicants had standing to sue on their claim that they should’ve been provided with the reports that led to them not being hired.

Because the statute meets both [Spokeo] tests, and because plaintiffs have alleged sufficient concrete harm, they have standing to bring their claim that SEPTA did not provide them with the required copies of their consumer reports, ” the panel said.

However, when it came to the applicants’ claim that SEPTA didn’t properly notify them of their rights under the FCRA, the panel said they didn’t meet Spokeo’s standard for proving concrete harm.

Plaintiffs argue that this was a concrete harm because it “increased the risk that … individuals would not know of their FCRA rights and have their claims lapse before they could bring suit,’ ” the panel said. Under the principles outlined above, this is a “bare procedural violation, divorced from any concrete harm,’ that cannot “satisfy the injury-in-fact requirement of Article III.’ Plaintiffs became aware of their FCRA rights and were able to file this lawsuit within the prescribed limitations period, so they were not injured. ”

Moreover, the panel said that any purported injury to unnamed class members who the applicants seek to represent isn’t enough to constitute a valid injury to the named plaintiffs, according to the ruling.

Plaintiffs … imply that unnamed class members remained unaware of their FCRA rights, ” the panel said. However, “[n]amed plaintiffs who represent a class must allege … that they personally have been injured, not that injury has been suffered by other, unidentified members of the class.’ ”

Christopher McNerney of Outten & Golden LLP, an attorney for the plaintiffs, told Law360 Monday that the decision “will help applicants with criminal histories access job opportunities” and is also “an important step forward toward ensuring that SEPTA will face legal review of its unfair hiring practices. ”

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Circuit Judges Michael A. Chagares, L. Felipe Restrepo and D. Michael Fisher sat on the panel for the Third Circuit.

The plaintiffs are represented by Ossai Miazad, Lewis Steel, Christopher McNerney and Cheryl-Lyn Bentley of Outten & Golden LLP, Jon Greenbaum and Dariely Rodriguez of The Lawyers’ Committee For Civil Rights Under Law, Benjamin Geffen of Public Interest Law Center, Ryan Allen Hancock of Willig Williams & Davidson, and Deepak Gupta of Gupta Wessler PLLC.

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The case is Frank Long et al. v. Southeastern Pennsylvania Transportation Authority, case number 17-1889, in the U.S. Court of Appeals for the Third Circuit.