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Preventing Background Screeners from Reporting Expunged Criminal Cases

By Sharon M. Dietrich

About one in three Americans has a criminal record of some kind. Eighty-seven percent of employers, 80 percent of landlords, and 66 percent of colleges screen for criminal records. Background checking has become an intractable barrier to the fundamental needs of life for huge numbers of people with criminal records and has become a significant cause of poverty in this country.

To surmount such a barrier, at least 31 states and the District of Columbia expanded their expungement or sealing laws between 2009 and 2014. The trend is to permit even convictions—felonies as well as misdemeanors—to be expunged after a period of desistance from crime. By eliminating public access to these criminal cases, these states broadly mitigated the collateral consequences faced by people who had demonstrated that they no longer presented heightened risk of criminal behavior.

But around the country the commercial background-screening industry, which runs the lion’s share of the background checks obtained by employers and landlords, sometimes reports these expunged cases long after they have been removed from the public record. Companies in the background-screening industry typically maintain their own privately held databases of criminal cases from which they generate background checks. When updating their data from public sources (often state courts), these screeners often do not use methods to determine whether cases that were reported by their sources have been removed (i.e., expunged or sealed), and they continue to report them.

The commercial screening industry’s reporting of expunged cases threatens to undermine the whole strategy of broadening expungement as a remedy for the harm of collateral consequences. But advocates can remedy this shortcoming, most notably with the Fair Credit Reporting Act. My legal services program, Community Legal Services Inc. of Philadelphia, demonstrated some of these strategies in a recent class action under the Act.

Giddiens v. LexisNexis

Community Legal Services represented John Giddiens in April 2010 in expunging a criminal case in which he had completed a diversionary sentence. In the waning days of 2011 I met Giddiens when he returned to our office; he was upset because he thought we had not properly expunged his case. The case had shown up on a background check prepared by LexisNexis. As a result, he was denied a holiday seasonal job through a staff agency that he had been promised before the background check came back.

I checked our office’s prior file for Giddiens and confirmed that we had done our job properly. The case no longer showed up in the public databases of the Administrative Office of Pennsylvania Courts or the Pennsylvania State Police. Indeed, it had been removed from Pennsylvania Courts’ public website within days of the expungement order—around 20 months before LexisNexis reported the case in its background check. The background check appeared to have been run from information maintained in a privately held database.

This reporting of Giddiens’s case long after the expungement order was especially puzzling because in 2010 Pennsylvania Courts devised an elegantly simple solution to the problem of commercial background screeners not having removed expunged cases from their databases and reporting them in background checks. After fielding many phone calls from Pennsylvanians complaining that their expunged cases were showing up in background checks, Pennsylvania Courts created a monthly data file. Called a “LifeCycle file,” it lists expunged cases to be removed from private databases. Pennsylvania Courts contractually required that this file be used by bulk purchasers of the data and any and all downstream users.

Community Legal Services assisted Giddiens in filing a dispute of the background-check report. But while the screener corrected the report by removing the case and reissuing the report, Giddiens was unable to get back the job that he had expected before the erroneous report was disseminated.

Community Legal Services reached out to Francis and Mailman, P.C., to bring suit against LexisNexis on behalf of Giddiens and potentially others for whom expunged cases had been reported in background checks. We are lucky that Francis and Mailman are our Philadelphia neighbors; the firm has a national practice suing consumer reporting agencies under the Fair Credit Reporting Act—one of the few firms around the country with a specialty in bringing class actions under the Act against background screeners.

Community Legal Services and Francis and Mailman decided to file a national class action in which Giddiens would be the named plaintiff, raising several claims under the Fair Credit Reporting Act. With respect to the expungement problem, our primary claims were raised under the two provisions that implicate accuracy: (1) consumer reporting agencies must follow “reasonable procedures to assure maximum possible accuracy,” and (2) in the employment context, unless a consumer reporting agency gives contemporaneous notice to the subject of the report of the furnishing of a background check to the employer, it must use “strict procedures” to assure that the information is “complete and up to date.”

The complaint alleged that the consumer reporting agency acted “willfully,” thereby subjecting the agency to statutory and punitive damages. The complaint sought only the maximum of $1,000 of statutory damages plus punitive damages, rather than actual damages, for each class member because certification of classes for actual damages sustained as a result of inaccuracy generally has not succeeded in Fair Credit Reporting Act litigation. We filed the case on May 14, 2012, in the U.S. District Court for the Eastern District of Pennsylvania, where Giddiens lives and our cocounsel practice.

Shortly after we filed the case, the background screener admitted that it had not applied the LifeCycle file to its data. It immediately began to apply the file to remove the cases that Pennsylvania Courts had expunged. However, it contended that it had not acted “willfully.” It argued that the case should be limited to the instances in which the LifeCycle file was available, that is, cases expunged by Pennsylvania Courts rather than by other state courts around the country.

Community Legal Services investigated whether other states used something similar to the LifeCycle file. We learned that Pennsylvania was practically unique in offering a list of expunged cases for removal. We then asked what “reasonable procedures” background screeners might use in other states to avoid reporting expunged or sealed cases.

An expert we retained from the background-screening industry opined that the way for screeners to remove expunged cases and other inaccuracies is by verifying the results of their initial data query with a courthouse search of records rather than simply reporting those database results as the background check. LexisNexis retained an expert who disagreed, arguing that most background checks prepared in this country do not include verification through a courthouse search.

Facing the deadline for filing for class certification, the parties settled. We were disappointed that because of the uniqueness of Pennsylvania Courts’ LifeCycle file, we settled solely on behalf of the approximately 300 persons whom the screener identified as having received inaccurate background checks due to LexisNexis’s failure to use the Pennsylvania file. The settlement provides for the full payment of $1,000 to those 300 persons without their having to make the claims that are usually required in Fair Credit Reporting Act class action settlements. Alternatively the class members could choose to establish lost wages in a simplified claims process, with the small risk that their minimum recovery would be $500. These lost wages were not limited in a given case, but liability was limited to $995,000 in the aggregate. The class notice indicated that Community Legal Services would consult with class members about this alternative remedy and possibly represent them.

The fairness hearing for the settlement was held on December 3, 2014. District Judge Legrome Davis entered the order approving the settlement on January 21, 2015. The deadline for filing claims is two months from the date of settlement approval by the court; as of publication, only one person has made a claim for lost wages rather than the guaranteed $1,000 payment.

Community Legal Services feels that this settlement was a good outcome overall. Most important, our litigation led LexisNexis and later First Advantage, which purchased the LexisNexis database, to use the LifeCycle file and remove cases ordered expunged by Pennsylvania Courts. Moreover, the $1,000 payouts are among the largest ever for a Fair Credit Reporting Act class action. That class members will simply receive checks in the mail without having to make a claim makes this payout even better. But we are disappointed that apparently very few class members will receive the lost wages that could easily be established.

Background Screener Reporting of Expunged Cases

Reporting of expunged cases is not isolated to Giddiens’s case, the 300 Pennsylvanians who are class members, or LexisNexis. This practice was challenged in at least three other class actions: Henderson v. HireRight Solutions Inc.; Roe v. Intellicorp Records Inc.; and Robinson v. General Information Services Inc.

Photo credit Aaron van Dorn

The settlements in these cases typically discontinued the use of stale data or required the screener to change its practice to begin verifying data.

However, while advocates have only three companies to sue when bad credit-checking practices are identified, the background-checking world has hundreds of players; indeed, there is no complete list of companies that sell background checks. Some of these companies will take pains to get their results correct. For instance, the 200 consumer reporting agencies that have signed on as members of a loose affiliation called “Concerned CRAs” have certified that they verify the results of a database search with the reporting jurisdiction before reporting them—a practice that should reveal if a previously reported case has been expunged. But the members of Concerned CRAs tend to be smaller companies. The larger members of the industry very likely report the results of a data query without verification and thereby greatly increase the likelihood that an expunged case will be reported. Throughout the industry, the chances of our clients’ expunged cases being reported by background screeners remain considerable and undermine the very purposes of their expungements.

Avoiding the Reporting of Expunged or Sealed Cases in Your State

You as an advocate can take particular steps to improve the chances that your clients’ expungements will be effective.

Warn Your Clients that They Could See Their Expunged or Sealed Cases Again. I tell my expungement clients that they should think about the implementation of their expungement like ants in their kitchen: you might think you got them all, but you may discover that one or two have escaped under the refrigerator. Criminal-case data go into many databases, both public and private, and rooting them all out may be a challenge. Encourage your clients to keep copies of their expungement orders in a safe place (in case they need them later to prove that the cases were expunged) and to contact you for follow-up if an expunged case reemerges.

Remove Expunged or Sealed Cases from Commercial Databases. Try (or recommend that your clients try) to register expungements with the “Expungement Clearinghouse.” This clearinghouse collects and transmits expungement orders to its members in the background-screening industry for free. Beware of a competitor that charges for the same service. The Center for Continuing Justice, which operates the clearinghouse, indicates that its updates reach 500 background-screening companies.

Alternatively you can send the expungement orders to the dominant companies in the industry or later ask for a “full file disclosure” to determine whether your clients’ expunged cases are still in their databases. A list of these larger companies may include ADP,, EmployeeScreenIQ, First Advantage, General Information Services, HireRight, Kroll, Intellicorp, and Sterling.

Just as people have the better-known right to a “free credit report,” so they have the right to see their “specialty credit reports” such as background checks. To obtain data that may not yet have been reported to an employer or other customer, be sure to request the “file” rather than the “reports” made by the screener. The Consumer Financial Protection Bureau offers a list of contacts. If the expunged cases are still reported, the client should file a “dispute” in response to the disclosure and submit a copy of the expungement order; doing so is likely to result in the case being removed. Such disputes are much better done in the full file-disclosure process rather than after an employer gets an erroneous report, perhaps costing your client a job.

Urge Your Public Sellers of Bulk Data to Produce Lists of Expunged Cases. All bulk sellers of criminal record data to the background-screening industry (often the administrative offices of state courts) should be developing a procedure like Pennsylvania Courts’ LifeCycle file, specifically identifying expunged or sealed cases to be removed from privately held data. The data purchasers and their downstream users should be required to use this list to remove expunged cases as a term of the purchase agreement. The seller should periodically audit the bulk purchasers to ensure that the file is being used and should check on any complaints that indicate that the file is not being used. Pennsylvania Courts or I can be contacted for more information about the LifeCycle file.

Complain to the Federal Trade Commission or the Consumer Financial Protection Bureau. A complaints strategy may not bring relief to an individual. However, the Federal Trade Commission and the Consumer Financial Protection Bureau track patterns identified by complaints that may result in enforcement action against background screeners with substandard practices.

Pursue Fair Credit Reporting Act Litigation. For a client who has sustained lost wages or other damages because of the reporting of an expunged or sealed case, litigation under the Fair Credit Reporting Act should bring relief. Individual cases are not overly complicated and have some deterrent effect if the client recovers a monetary award. Practice changes are not likely to be obtained in response to an individual case, although we would like to think that, having been put on notice of a deficiency by the lawsuit, a background screener would be prompted to examine its practices. At the least, individual cases will set up a “willfulness” claim if there is a subsequent class action against this practice. I can be contacted for a model complaint and for advice on litigating such a claim.

Practice changes regularly are negotiated as a component of settlements of Fair Credit Reporting Act class actions, even though most circuits have ruled that private parties cannot obtain injunctions under the Fair Credit Reporting Act. Moreover, the likely monetary damages in a class action should be a deterrent. As noted in the discussion of Giddiens’s case, however, class actions are not a good vehicle for assisting clients in recovering large amounts of lost wages because such claims are difficult to certify.

Encourage Employers to Use Background Screeners that Verify Their Data. Employers often express exasperation that the reports supplied by their screeners are not as accurate as they could be. The answer? Get a better screener! By pledging to verify the results of a database query, the members of Concerned CRAs deserve consideration.

When the expungement that our clients were counting on for a fresh start does not work, we and our clients become frustrated. But eliminating a criminal case is the best thing that we can do for a client. If the case is not known, then employers, landlords, and others need not be relied upon to apply the law properly or use sound discretion when evaluating that case. We can, and should, be prepared to deal with the background screeners who must be brought into line to avoid undermining the efficacy of this crucial remedy for our clients.

Sharon M. Dietrich
Litigation Director
Community Legal Services Inc.
1424 Chestnut St.
Philadelphia, PA 19102

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