Colorado employers are obligated under the federal Fair Credit Reporting Act ("FCRA") and the state Colorado Credit Reporting Act ("CCRA") to report accurate information about an employee to the relevant agency. But what happens when an employer reports inaccurate information? While there is not a private right of action against the employer for furnishing the inaccurate information, employers are obligated to investigate the accuracy of the information reported and correct any inaccurate information.
The U.S. District Court for the District of Colorado recently held that each report of allegedly false information triggers a new duty to conduct a reasonable investigation, which in turn resets the clock for when a FCRA claim can be brought. 1 In Maiteki v. Marten Transportation Ltd., a truck driver fell victim to an inaccurate and negative driving record when three of the truck driver’s previous employers sent inaccurate information to a credit reporting agency regarding the driver’s driving performance, which led to a negative Drive-A-Check driving report. In essence, the employers reported that the truck driver was in non-recordable accidents even though no accidents ever took place. These instances of false accident reporting from the three separate employers spanned over the course of four years from March 2007 until December 2011.
In the fall of 2008, the truck driver applied for but was not hired for three driving positions because of the negative Drive-A-Check report, and the inability to gain employment as a truck driver resulted in dramatic loss of income. The truck driver as well as the credit reporting agency notified the employers of the inaccurate reporting. The employers validly responded that they would conduct investigations and remove any inaccurate information from the credit report. However, the false information remained on the report even after further notifications in May 2010 and on March 7, 2012. On March 20, 2012, the truck driver was not hired by a trucking company based on the negative Drive-A-Check report, which still contained the false information provided by the three employers.
The truck driver filed a lawsuit against all three employers alleging, among other things, falsely reporting accidents to the credit agency in violation of the FCRA and the CCRA. The District Court dismissed portions of the claim dealing with reporting false information because neither the FCRA nor the CCRA create a private right of action against employers for furnishing information. All three employers were notified that they reported false information, promised to investigate and remove any false information, but, ultimately, failed to remove any false information from the truck driver’s credit report. The District Court held that the truck driver provided sufficient facts to state a claim for failure to conduct a reasonable investigation.
The employers argued that the truck driver’s claim must fail because it was untimely. The FCRA permits a claim to be brought within two years of discovery of the violation or five years of the date of the violation, whichever is earlier. Where Colorado law differs from some other jurisdictions is that Colorado resets the clock for when a FCRA claim can be brought because Colorado courts reason that each re-report of allegedly false information is a separate FCRA violation that triggers a new duty to conduct a reasonable investigation. This means that even though the truck driver learned about the violation in September 2008, the truck driver’s reasserted dispute with the credit agency on March 7, 2012, constitutes acknowledgement of a separate FCRA violation, therefore triggering a new duty for the employers to conduct a reasonable investigation of the inaccurate information.
Colorado employers should take note that whenever they receive notice that an employee disputes reported information, under the FCRA they have a new duty to investigate that information and the statute of limitations restarts. However, the weight of this decision may be limited as courts in Texas and Georgia have held otherwise.
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1Maiteki v. Marten Transportation Ltd., No. 12-cv-2021-WJM-CBS (D. Colo. Dec. 4, 2013).