Fair Credit Reporting Act doesn’t apply to complaints that lead to firing

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in Discrimination and Harassment,Employment Background Check,Firing,Human Resources,Leaders & Managers,Management Training

You no doubt know that the Fair Credit Reporting Act (FCRA) covers many background investigations conducted by entities defined as consumer reporting agencies. If you decide not to hire an applicant based on a background check, the applicant has a right to see the information the reporting agency provided.

But what about complaints from customers or clients that become the basis for termination? Do those complaints have to be disclosed to the fired employee?

Not according to a recent 5th Circuit Court of Appeals decision.

Recent case: Jeffrey Kretchmer, a practicing Conservative Jew, worked as an account executive for a women’s lingerie and swimwear company. When the company decided to reorganize sales territories, Kretchmer would have been responsible for two major accounts: Neiman Marcus and J.C. Penney.

But Kretchmer’s supervisors had heard previous complaints from both retailers about Kretchmer’s performance. They concluded he shouldn’t be placed in charge of their accounts and therefore terminated him.

Kretchmer sued, alleging religious discrimination and FCRA violations. He claimed that he was entitled to see the underlying complaints because his employer relied on them to justify discharging him.

The 5th Circuit Court of Appeals rejected his claim. It said retail stores that supply information based on their experience with consumers aren’t covered by the FCRA. Kretchmer was therefore not entitled to copies. It also dismissed the other discrimination claims. (Kretchmer v. Eveden, No. 09-10556, 5th Cir., 2010)

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