Compliance Alert: Avoid the use of adverse adjudication statuses

Learn how to avoid the use of adverse adjudication statuses at pre-adverse action stage

Resource thumbnail A recent trend in cases filed by plaintiffs’ counsel alleges violations of the Fair Credit Reporting Act (FCRA)’s pre-adverse and adverse action requirements based on employers’ use of certain adjudication statuses, such as “fail” or “ineligible,” at the pre-adverse action stage. Plaintiffs argue that the adjudication to “fail” or “ineligible” indicates that the employer made a final decision not to hire the individual before providing the individual with a copy of his or her report and an opportunity to dispute.

In making this argument, plaintiffs focus on the wording used – “fail” or “ineligible” – to illustrate that the decision was no longer pending or subject to review, and therefore in violation of the FCRA.