The Massachusetts Court of Appeals issued a significant decision regulating the hiring process in the Commonwealth in a case called Kenn v. Eascare, LLC, 22-P-1017 __ Mass. App. Ct. __ (Jan. 8, 2024). Kenn resolves whether a former employee has standing to assert individual and class wide claims against her employer (an ambulance service) for an alleged willful failure to comply with a federal statute, the Fair Credit Reporting Act (FCRA) in the hiring process when it required Ms. Kenn and others to sign a disclosure and authorization form purporting to authorize it to procure a consumer report where the form allegedly contained language releasing the employer and third-parties in connection with such background investigations for employment purposes.
The FCRA generally requires an employer requesting a consumer report on a job applicant or employee to first: a) furnish a separate “clear and conspicuous” written disclosure to the individual that a consumer report may be obtained for employment; and b) obtain his or her written authorization to do so. The FCRA provides for concurrent jurisdiction; meaning suit may be brought in either a Federal or State court.
Why this decision is important for Massachusetts employers –
It confirms that consumers such as job applicants, employees and former employees have “standing,” meaning the legal right to sue, for FCRA violations in the courts of the Commonwealth without the requirement of claiming a “concrete” injury as that term is used in federal court interpreting the same federal statute. Instead, jurisdiction in the state court is established where a plaintiff makes allegations “plausibly” suggesting that a particularized, nonspeculative violation of FCRA resulting in injury has occurred and entitlement to damages.
In light of the Kenn decision, it may be advisable to audit the form of disclosure and authorization used for conducting background checks to ensure that they are in compliance with the legal requirements. Additionally, a review of the company’s service agreements with background check vendors for responsibilities in this area might be warranted as well.
Due to the procedural posture of the case, the Court was required to accept the plaintiff’s factual allegations as true and draw all reasonable inferences in her favor. The following summary is from the complaint and Appeals Court decision.
Ms. Kenn applied for a position as an emergency medical technician with Eascare, LLC, an emergency ambulance service with locations throughout Massachusetts. The position paid approximately $16.25 per hour working 40.5 to 48 hours per week for three shifts – Monday, Wednesday and Friday.
Eascare directed Ms. Kenn to sign a two-sided document titled “Consumer Report/Investigative Consumer Report Disclosure and Release of Information and Authorization” form as part of her application process.
The Court notes that while the front side of the form was arguably in compliance with the FCRA, it was the verbiage on the back side of the form – the releases of liability exonerating Eascare and Eascare’s vendor for background checks – which gave rise to the claim against the employer that it violated FCRA by not providing plaintiff with “a document that consists solely of the disclosure” required by FCRA.
At some point after Ms. Kenn was hired, she learned that coworkers were making multiple statements about her over a long period of time that were sexual in nature and based on the fact she is a woman. Ms. Kenn filed an internal complaint with Eascare but, according to her lawsuit, Eascare did nothing to remedy the matter. Instead, Ms. Kenn alleged, Eascare cut her pay and effectively reduced her hours in retaliation.
Ms. Kenn resigned within a year; arguing she was constructively discharged because of a hostile work environment.
Prior to filing suit, Ms. Kenn filed a non-payment of wages complaint with the Massachusetts Attorney General’s office. In addition, Ms. Kenn filed a Charge of Discrimination with the Massachusetts Commission Against Discrimination and was given a “right to sue” letter by the MCAD.
The Court concludes the plaintiff adequately described her injuries for purposes of having standing to assert claims of violations of FCRA in state court. Plaintiff alleged that without a clear notice that a consumer report would be procured, job applicants cannot preserve their privacy or to correct errors in the report. By containing an exculpatory clause releasing it from liability, Eascare’s form misinformed applicants about their legal rights under FCRA and whether or how to enforce them. Because the form was not clear, conspicuous or stand-alone it did not validly authorize Eascare; resulting in an invasion of Ms. Kenn’s privacy, including disseminating her private information without proper authorization.
After reviewing the FCRA’s language and overarching goals, the Court concludes the “FCRA clearly creates a cause of action for an individual . . . against any person, such as Eascare, who willfully fails to comply with ‘any requirement’ of FCRA.” “Congress provided a cause of action to sue, in State (or Federal) court, ‘to enforce any liability created’ under FCRA. Under FCRA, ‘[a]ny person who willfully fails to comply with any requirement imposed under this title with respect to any consumer is liable to that consumer’ for actual or nominal damages.”
According to the Court, “Eascare’s willful failure to provide the plaintiff with the disclosure required by [FCRA], thereby obtaining her authorization to conduct the consumer report, if proven, would establish ‘liability.’ Under the plain language of FCRA, the plaintiff alleged legal injury for which Eascare is liable.” “Although the plaintiff may not be able to articulate concrete, actual damages arising from Eascare obtaining her consumer report by using a noncompliant disclosure form and requiring her to agree to a release of liability in addition to a background check, the FCRA liability provisions recognize that the injury to the consumer may not be measurable.”
Court’s Holding & Next Events
The Court holds “[b]ased on the provisions of FCRA that establish the employer’s liability for willfully violating FCRA’s requirements and provide a cause of action for plaintiffs who are subject to such violations, . . . the plaintiff does have standing in the courts of the Commonwealth.”
As for the litigants in Kenn, the lower court’s dismissal of individual and class wide claims alleging willful violations of FCRA are revived and, unless settled, it appears Ms. Kenn will prosecute her claims by arguing that rights conferred to consumers by the FCRA were violated when her former employer, it is alleged, failed to comply with certain requirements of FCRA causing injury. If successful, FCRA authorizes the award of actual or nominal damages, punitive damages, costs and reasonable attorney’s fees.
Dated: Sudbury, MA
January 23, 2024
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 This annotation is limited to summarizing the facts and holding in Kenn. No effort is made in this annotation to address the many and varied rights and responsibilities under the FCRA and applicable State statute governing background checks. Nor does this annotation address special rules under the FCRA for motor carriers and job-seekers applying by remote means.
 Two claims in her complaint alleged nonpayment of wages against Eascare and an individual and sex discrimination against Eascare and an individual. By stipulation of the parties, these claims were dismissed with prejudice. Kenn v. Eascare, LLC, 22-P-1017 __ Mass. App. Ct. __, slip op. at n.1 (Jan. 8, 2024).