Lawsuit over false background check moves ahead

A father whose application to volunteer at his daughters’ school was repeatedly denied after background checks inaccurately listed a pending felony charge can proceed with his federal lawsuit. A U.S. district judge in St. Paul has denied a motion for summary judgment by the company that produced the erroneous reports.

Joseph Cross wished to volunteer at his daughters’ elementary school for two events in February 2024. Per the school’s volunteer application process, Cross had to submit to a background check and pass it. The school ordered a background check from the company Security Check Me LLC.

However, the background check reported that Cross had a pending felony criminal charge in Minnesota. That was inaccurate. Cross was acquitted of the felony in July 2022, something that could be verified through public records. The school denied his volunteer application because of the pending felony criminal charge.

Cross informed the school that the background check was incorrect, submitting court records showing that he had been acquitted. Following the school’s volunteer application process, Cross reapplied for volunteer positions at the school in September 2024. Once again, the school ordered a background check from Security Check Me LLC. And, again, the background check showed that Cross had a pending felony charge. The school rejected the application.

Finally, Cross applied to be a volunteer in December 2024. The school again ordered a background check from Security Check Me LLC.  The background check erroneously showed that Cross had a pending felony charge.

Cross filed this lawsuit in June 2024. He claimed that the inaccurate background check violated the Fair Credit Reporting Act (FCRA). Cross alleged that Security Check Me did not “follow reasonable procedures to assure maximum possible accuracy.”

But Security Check Me claimed that the background check was not a “consumer report,” so the FCRA did not apply. It maintained that, because the background check was related to a volunteer position, it was not a consumer report.

Fredrikson & Byron, counsel for Security Check Me, declined to comment to Minnesota Lawyer.

Under the FCRA, consumer reporting agencies must “adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information.”

Consumer reports are defined as “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 characteristics, or mode of living.”

Security Check Me moved for summary judgment, claiming that the “purpose clause” of the FCRA was not satisfied because it was not used for a listed purpose, as it was a volunteer position and did not establish eligibility for employment.

However, in a ruling filed May 12, U.S. District Judge Laura Provinzino cited a 1998 8th Circuit case in which the court found that the ultimate use of the report did not determine whether a credit report was a consumer report, but that it turned on the purpose of original collection.

“Thus, the background check here would constitute a consumer report if Defendant expected the information it compiled on Cross to be used for an enumerated purpose or compiled that information to be potentially used for an enumerated purpose,” wrote Provinzino.

Although Security Check Me claimed that it did not gather the information or intend for it to be used for an enumerated purpose, Provinzino stated that at this early stage of pleading, all that was necessary to consider was whether the complaint made plausible that Security Check collected information about Cross for employment-related purposes or anticipated that it would be used for such purposes.

Cross claimed that Security Check Me sells consumer reports from its database to employers who use them to make hiring decisions. He also alleged that the company is a consumer reporting agency that regularly gathers and assembles information on consumers to provide employment-related reports to third parties.

“Accepting Cross’s allegations as true, Defendant compiled the information on Cross expecting that it would be used for employment purposes or compiled it for that use,” Provinzino asserted.

The court denied Security Check Me’s motion to dismiss.

Cross has no comment, according to Consumer Justice Law Firm.