Judge allows lawsuit to proceed vs Sprint over claims company's background check forms break law

By Dana Herra | Feb 24, 2016

A potential class action lawsuit claiming Sprint violated consumer protection laws when it ran credit checks on job applicants will proceed, after a federal judge refused the company’s motion to dismiss.

Roberto Rodriguez Jr. filed a lawsuit in November, docketed in Chicago federal court as Case No. 15-C-10641, against Sprint Corporation and Sprint United Management Company, which manages Sprint’s subsidiaries. Rodriguez applied for a job at a Sprint Wicker Park/Bucktown retail location in June 2015. As part of the application process, Rodriguez was given a disclosure form concerning background checks Sprint would conduct as part of considering his employment application.

According to the Fair Credit Reporting Act, such disclosure forms should be “clear and conspicuous … made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists only of the disclosure that a consumer report may be obtained for employment purposes.”

According to court documents, the form Rodriguez was required to complete and return to Sprint included “third-party authorizations, a blanket release of multiple types of information from multiple types of entities, state-specific information, and various statements above and beyond a disclosure that a consumer report would be procured.”

Rodriguez voluntarily dismissed Sprint Corporation as a defendant in December.

According to court documents, Sprint offered to settle with Rodriguez for $1,000, the maximum amount of damages under the law. After Rodriguez allowed the settlement offer to lapse, Sprint moved to dismiss, arguing that because Rodriguez did not allege any actual damages, he had not suffered any injury that would grant him standing to sue.

On Feb. 18, however, U.S. District Judge Matthew F. Kennelly rejected the company’s reasoning.

“Although the Constitution limits Congress’ power to confer standing, the Supreme Court has recognized that Congress may ‘elevate to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law,” Kennelly wrote in his opinion.

One way Congress does this, Kennelly wrote, is by creating statutory rights which, if violated, give rise to an injury sufficient to create legal standing.

“It is readily apparent that Rodriguez has alleged an injury in fact sufficient to confer standing to sue,” Kennelly wrote, adding that the sections of the Fair Credit Reporting Act to which Rodriguez’s lawsuit refer “exist to ensure that consumers who authorize disclosure do so freely and knowingly, and … it imposes a binding, mandatory obligation on a party in Sprint’s position.”

Kennelly dissected the case law Sprint had cited in its dismissal and found that the factors that led to the courts’ final decisions in those cases are not present in this case and do not apply.

Rodriguez has filed the suit as a class action, which would potentially include a group of other plaintiffs, including any job applicants on whom Sprint ran an employment-related credit check since Oct. 20, 2013. If the company is found in violation of the Fair Credit Reporting Act, the law provides for damages of not less than $100 and not more than $1,000 on each violation.

Kennelly directed Sprint to file a response to the complaint by March 3. The next court date is March 23, when the case will be set for a discovery and pretrial schedule.

Rodriguez is being represented by attorneys Ryan F. Stephan, James B. Zouras and Jorge A. Gamboa, of the firm of Stephan Zouras LLP, of Chicago, and attorneys E. Michelle Drake and Anna P. Prakash, of the Nichols Kaster law firm, of Minneapolis.

Sprint United Management Company is represented in the action by attorneys with the firm of Proskauer Rose LLP, with offices in Chicago and New York.

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Organizations in this Story

Nichols Kaster, PLLP Proskauer Rose LLP Sprint Corporation Stephan Zouras LLP

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