LinkedIn Sued for Providing “Trusted References” to Paying Subscribers

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.