Understanding the 3/2 Rule of Employee Productivity
A federal judge in the Northern District of California dismissed a case brought by four plaintiffs last fall claiming that LinkedIn was operating as a consumer reporting agency (CRA). The plaintiffs claim that the site’s feature “Search for References” constitutes as a consumer report under the Fair Credit Reporting Act (FCRA). By accessing this information, employers could get details about an applicant’s work history and even send messages to previous co-workers without the applicant providing any written consent.
The allegations go on to say that employers would use the information obtained through LinkedIn in making a hiring decision without the applicant’s consent, and not provide certain disclosures before the check was completed. Furthermore, applicants who were denied employment were not afforded the pre-adverse/adverse action process (applicant dispute) which is in pure violation of their rights under the FCRA. In making his decision, U.S. Magistrate Judge Paul Grewal said LinkedIn is not a CRA as defined by the law; therefore, acquiring reference reports from the site does not mean that it is a consumer report subjected to the FCRA.
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