On October 9, 2014, a class action complaint was filed in
the U.S. District Court for the Northern District of California alleging that
LinkedIn violated the Fair Credit Reporting Act, 15 U.S.C. §
1681 et seq., (“FRCA”) by offering to subscribers reports containing “Trusted
References” without complying with the FCRA’s requirements to keep the data
safe from disclosure. Sweet v. LinkedIn Corp.,
Civ. A. No. 5:14-cv-04531 (N.D. Cal. filed Oct. 9, 2014) (available at Law360 - subscription required).
Specifically, the complaint alleges that LinkedIn: 1) failed
to comply with the certification and disclosure requirements of the FRCA for
credit reporting agencies who furnish consumer reports for employment purposes;
2) failed to maintain reasonable procedures to limit the furnishing of consumer
reports for the purposes enumerated in the FRCA and to assure the maximum
possible accuracy of these reports; and 3) failed to provide the notices
required by the FRCA to users of the consumer reports. Id.
at 2. Plaintiffs seek both damages for
past violations and injunctive relief to prevent the continued misuse of these
reports in violation of the FRCA. Id.
These “reference reports” compile information about “people
in your network who can provide reliable feedback about a job candidate or
business prospect” – including a list of others in your network who worked at
the same company as the job candidate during the same time period. Id.
at 7 (citing LinkedIn’s Premium Help Center); see also Trusted
References for Job Candidates (last updated 4/21/14); Reference
Search (last updated 11/27/13). In
addition, these reference reports encourage the potential employer to contact
these references either through a formal Introduction or through inMail – both of
which are communication methods available to LinkedIn members. Compl. at
7.
Notably, LinkedIn users are not notified when a potential
employer requests one of these reference reports about them. Id.
at 8. As a result, the complaint
concludes: “any potential employer can
anonymously dig into the employment history of any LinkedIn member, and make
hiring and firing decisions based upon the information they gather, without the
knowledge of the member, and without any safeguards in place as to the accuracy
of the information that the potential employer has obtained.” Id.
In essence, the complaint alleges that LinkedIn has “created
a marketplace in consumer employment information, where it sells employment
information, that may or may not be accurate, and that it has obtained in part
from unwitting members, and without complying with the FRCA.” Id. at
9. In all, the complaint alleges
five counts of FRCA violations, seeks damages and injunctive relief, and seeks
a jury trial.
Next Steps
LinkedIn
has the option of answering the complaint or making any one of a number of
12(b) motions to challenge the sufficiency of the complaint. It may take some time before this issue is
ripe for decision (any decision) by the court.