Q. We suspect that one of our employees has filed a fraudulent workers’ compensation claim. We would like to hire a private investigator to gather information on his activities. By doing so, are we subject to the requirements of the(FCRA)?
A. Under the FCRA, if an employer seeks a consumer report from a consumer reporting agency regarding an individual, the employer must generally satisfy a series of notice requirements.
The FCRA defines a consumer report as “any written, oral or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristic or mode of living which is used or expected to be used … for the purpose of serving as a factor in establishing the consumer’s eligibility for … employment purposes.”
Many employers hire an outside organization to track an employee’s activities while on workers’ compensation leave. The information gathered likely will involve the worker’s reputation and personal characteristics, and may be a factor in the individual’s continued employment.
Furthermore, the FCRA defines consumer reporting agency as “any person which, for monetary fees … regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information on consumers for the purpose of furnishing consumer reports to third parties.”
Generally, if an employer hires a private investigator to conduct an investigation and provide the employer with a report (or even video surveillance tapes), the investigator will be considered to be a consumer reporting agency.
An employer may argue that a private investigator is not a consumer reporting agency because he or she does not “regularly” provide consumer reports. However, given the uncertainty of how a court may rule in this situation, it will be wise for employers to assume that a private investigator is a consumer reporting agency.