Foot Locker Obtains Summary Judgment in FCRA Class Action

Retailer Foot Locker, Inc., won summary judgment in the Northern District of California in a first-of-its-kind putative class action involving the reach of the definition of a “consumer report” under the Fair Credit Reporting Act (FCRA) and related California statutes.  Shook Partners Bill Martucci and Katherine Sinatra represented Foot Locker with Associate Elizabeth Lee and paralegal Shasta Sanders. 

The plaintiff, a former part-time employee, brought the case on behalf of all applicants for employment nationwide during the previous five years, alleging that the consent form she signed during her application process was defective because it contained “extraneous” information and that she did not receive clear disclosure of her privacy rights under the FCRA. 

Because Foot Locker does not conduct background checks to determine eligibility for employment of part-time employees, it denied obtaining a background report (or consumer credit report) on the plaintiff. However, the plaintiff argued that Foot Locker used a third-party vendor to verify her immigration status through E-Verify. Because the vendor is owned by credit reporting agency Equifax, the plaintiff alleged the background check was a consumer credit report subject to FCRA protections. 

The court ruled for Foot Locker, finding no reasonable juror could find that the E-Verify report was a background check or “consumer report”—the threshold for liability under the FCRA. The court’s refusal to entertain plaintiff’s interpretation of the definition of “consumer report” was a critical ruling for all employers who contract with third parties to run E-Verify reports.   

The court also dismissed plaintiff’s claim under California’s Unfair Competition Law (UCL). Foot Locker was entitled to summary judgment on the UCL claim because it was “tethered” to the consumer reporting claims, the court said.   

The case is Zelaya v. Foot Locker, Inc., No. 17-3279 (N.D. Cal., June 1, 2018). Law360 covered the result in its article “Foot Locker Kicks Former Employee’s FCRA Suit,” June 4, 2018.