Juster v. Workday, Inc.

Background

Benjamin Juster brought a class action against Workday, Inc. and HireRight, LLC, which the opinion refers to as “HR.” Workday made Juster an employment offer in June 2021 conditioned on a background check, and Workday had HR conduct that check. Juster alleged violations of the Fair Credit Reporting Act (FCRA), California’s Investigative Consumer Reporting Agencies Act, California Labor Code section 432.3, and other state laws.

The FCRA claims concerned the documents used for the background check. Juster argued that Workday’s disclosure was improper because it said the report could include earnings history, while California Labor Code section 432.3 prohibits an employer from seeking an applicant’s salary-history information. He argued that this reference made the disclosure misleading, included information outside the required disclosure, and undermined his authorization for the report. He also asserted FCRA claims against HR.

Ruling on the FCRA claims

The court granted Workday’s motion to dismiss the FCRA claims as pleaded. The FCRA requires a clear and conspicuous written disclosure that a consumer report may be obtained for employment purposes, in a document consisting solely of that disclosure, along with the applicant’s written authorization. The court rejected Juster’s argument that listing earnings history made Workday’s disclosure unclear or misleading for purposes of this requirement. It reasoned that the disclosure clearly identified the report’s employment purpose and the information Workday sought, allowing the prospective employee to give or withhold knowing consent. The court also held that the earnings-history reference was part of a brief explanation of what the consumer report might contain, rather than impermissible extraneous information.

The court also rejected, for purposes of the pending motion against Workday, Juster’s suggestion that another FCRA provision governing certifications by consumer reporting agencies supported his claim. The court said that provision addressed the relationship between an employer and a consumer reporting agency, while the motion before it concerned Workday’s obligations as the employer.

The court granted HR’s motion to dismiss the FCRA claims as pleaded. It held that the FCRA provision requiring disclosure and authorization before obtaining an employment-purpose consumer report applies to the employer or other user that procures or causes the report to be procured, not to a consumer reporting agency such as HR. The court was also not persuaded that the allegations supported proposed claims against HR under provisions concerning adverse action, agency certifications, permissible purposes, or investigative consumer reports. In particular, the allegation that HR conducted personal interviews for an investigative report merely repeated statutory language and did not identify anyone who was interviewed.

State-law claims and leave to amend

Because the viability of the federal claims was unresolved after dismissal, the court deferred ruling on Juster’s state-law claims against both defendants. Those claims included alleged violations involving restraints on employment, salary-history inquiries, conviction history, California disclosure requirements, unfair competition, contract theories, the implied covenant of good faith and fair dealing, and the Private Attorneys General Act.

The court allowed Juster to amend and replead the FCRA claims against Workday and HR if he could do so in good faith. It required him to identify the specific FCRA provisions allegedly violated, provide nonconclusory supporting facts, and clarify who was asked for earnings-history information. The court stated that the only amendment permitted at that time concerned the FCRA claims. The amended complaint was due within four weeks of the order. If no amended complaint were filed, the court would later consider whether to retain supplemental jurisdiction over the remaining state-law claims.

Disposition

The order granted Workday and HR’s motions to dismiss the FCRA claims and deferred ruling on the motions to dismiss the state-law claims. It granted leave to amend the FCRA claims and disposed of Docket Nos. 26 and 29.