On October 1, 2015, the U.S. District Court for the Eastern District of Pennsylvania issued a decision in Ramos v. Genesis Healthcare, LLC, upholding an employer’s use of a credit report in connection with a decision to not hire an applicant and further held that the employer did not fail to give the applicant sufficient opportunity to explain the issues identified in the background report before making a final decision to decline the job application.

Plaintiff Doris Ramos applied for a job as an occupational therapist with Genesis Healthcare, a company which provides nursing and other rehabilitative services. Genesis interviewed Ramos and orally extended a job offer, subject to completion of a background check. Genesis obtained a background report from General Information Services (GIS), which runs background checks and scores applicants based on criteria provided by potential employers. Ramos’ background report described three criminal convictions, including a conviction involving injury to a child. Although GIS scored the report as requiring review by Human Resources, Genesis determined that based on the background report, Ramos did not meet its criteria for employment and scored her as unqualified.

The following day, Ramos was sent a Pre-Adverse Action Notice, as required by 15 U.S.C. § 1681b(b)(3)(A), and which informed Ramos that she had the right to dispute the accuracy of the information in the background report. Ramos subsequently spoke to Genesis’ Human Resources group and tried to explain why certain information relating to the identified convictions was inaccurate. Genesis stood by its decision. Ramos filed suit against Genesis, GIS and an affiliate thereof. With respect to Genesis, Plaintiff claimed that Genesis, when it graded Ramos as unqualified, had in fact made an adverse action decision, and that Genesis violated FCRA by failing to provide a Pre-Adverse Action Notice before an adverse decision had “actually” been made.

The Court granted summary judgment to Genesis on the claim, finding that FCRA “allows for the formation of an intent to take adverse action before complying with § 1681b(b)(3)(A)”, and that even if the Genesis had graded Ramos as unqualified, the fact that Genesis subsequently communicated with Ramos and considered her explanation was sufficient proof that a final employment decision had not been made when Ramos was scored as unqualified. In summary, Genesis was “entitled to make an internal determination of ‘intent’ to revoke the employment offer so long as it affords a real opportunity to challenge this internal determination.” The court also rejected Ramos’ claim that the seven days between the mailing of the Pre-Adverse Action Notice and Genesis’ relaying of its final decision was insufficient time to contest the issues in the background report, finding that FCRA did not suggest a bright-line test for what constituted a reasonable amount of time between the Pre-Adverse Action Notice and the adverse action.

The case illustrates that notwithstanding the increasing use of background reports and scoring of job candidates based on the results of background reports, employers can avoid potential FCRA claims (both individual plaintiff and class action) by fulfilling the purposes of the Pre-Adverse Action Notice requirement and providing job applicants with a reasonable opportunity to explain or contest information contained in a background report used to make an employment decision. The case is Ramos v. Genesis Healthcare, LLC, Eastern District of Pennsylvania No. 15-52.