EEOC Informal Discussion Letter

The U.S. Equal Employment Opportunity Commission

EEOC Office of Legal Counsel staff members wrote the following informal discussion letter in response to an inquiry from a member of the public. This letter is intended to provide an informal discussion of the noted issue and does not constitute an official opinion of the Commission.

TITLE VII: Relationship of FCRA to Harassment

February 8, 2001

Dear :

This is in response to your inquiry on behalf of the U.S. Department of Commerce (Commerce) to Carlton Hadden, the Director of the U.S. Equal Employment Opportunity Commission's Office of Federal Operations. Mr. Hadden referred your letter to this office for a response. Your letter related to the Fair Credit Reporting Act (FCRA) and its applicability to workplace investigations. You expressed concern that the Federal Trade Commission's (FTC) interpretation of the FCRA as applying to investigations of workplace misconduct, including those pertaining to discrimination, puts Commerce and other government agencies in a difficult position. We appreciate this opportunity to respond.

EEOC Efforts to Resolve FCRA Issue

The genesis of this issue, of course, was the FTC staff opinion letter stating that the FCRA applies to sexual harassment and other workplace investigations just as it applies to other investigations performed by third party investigators. See Vail (4/5/99) (available at https://www.ftc.gov/policy/advisory-opinions/advisory-opinion-vail-04-05-99). We contacted FTC staff early on and discussed with them the importance of outside investigators to EEO enforcement and compliance. We also attempted to persuade the FTC to reconsider its position, as did others in the EEO community. The FTC did reconsider the issue. It ultimately responded, however, that while it understood the concerns expressed by EEOC and others, and in fact shared those concerns to a considerable degree, in its view the legal analysis in the Vail letter was accurate. The FTC told us that potential conflicts between the FCRA and other federal laws would have to be resolved by Congress.

As you have noted, both the EEOC and the FTC publicly expressed their respective positions in testimony before the House Banking Committee's Subcommittee on Financial Institutions and Consumer Credit on May 4, 2000. Former Chairwoman Ida L. Castro testified that although the FCRA provides important consumer protections in an area which is properly the subject of federal legislation and enforcement, the FTC's interpretation expressed in the Vail letter has serious unintended consequences for the enforcement of federal EEO laws. The FTC's General Counsel testified that it supported an amendment to the FCRA that would alleviate potential conflicts between the FCRA and other federal laws without gutting the FCRA's fundamental privacy protections. (FTC staff recently informed us that the new FTC Chair has disavowed neither the Vail letter nor the FTC's testimony at the May 2000 hearing.)

In the months that followed the hearing, White House staff facilitated discussions between the interested parties in an effort to develop a consensus legislative proposal. In addition to EEOC and FTC attorneys, participants included representatives of employers, workers, investigation firms, and consumers. The discussions did not lead to a final consensus proposal. We do know, however, that a bill was introduced in Congress last spring. See H.R. 1543 (available at http://thomas.loc.gov). The bill has not moved out of the Subcommittee on Financial Institutions and Consumer Credit.

U.S. District Court Questions Analysis in Vail Letter

To date, we know of only one court that has expressed any opinion on the validity of the Vail letter. In Johnson v. Federal Express Corp., 147 F. Supp. 2d 1268 (M.D. Ala. 2001), a non-EEO case, an employee alleged an FCRA violation in her employer's handling of an investigation into anonymous threats of violence. The court applied the FCRA to the case, but in dicta stated that the Vail letter is

not binding and not persuasive. The ABA Section of Labor and Employment Law and other commentators have pointed out that the application of the FCRA's notice-and-delay provisions would undermine the efficiencey and efficacy of employers' legitimate workplace investigations. See Theresa L. Butler, The FCRA and Workplace Invistigations, 15 Lab. Law. 391, 399-400 (2000); Kim S. Ruark, Comment, Damned If You Do, Damned If You Don't? 17 Ga St. U. L. Rev. 575, 598-603 & n.201 (2000). Moreover, FTC appears to have drawn a false analogy between employment decisions, by a present or prospective employer, based on information about a consumer's general status (such as credit, criminal or family history and the like) and a decision by a present employer about the consumer's particular workplace conduct (such as his threats of violence). Congress was not concerned with the latter, as evidenced by the bill's conference committee report .... Employer investigations of specific workplace acts by their employees ... simply are of no import to Congress.

Id. at1272 (emphasis in original; citations deleted). Stating it "need not enter this thicket," the court then proceeded to apply the FCRA to the workplace investigation at issue in the case, ultimately holding the FCRA had not been violated. Id. at 1273-76. The aspersions the court cast on the Vail letter may foreshadow its future in the courts.

Suggestions to Minimize FCRA Burden

While Commerce's EEO responsibilities remain unchanged, we do understand the practical difficulties you face. So does the FTC, according to its public statements. Indeed, a letter titled Meisinger (8-31-99) (available at www.ftc.gov) contains FTC guidance on how employers can minimize the practical burden of the FCRA:

• Employee consent "can be routinely obtained at the start of employment, thereby relieving the employer of the awkward prospect of having to ask a suspected wrongdoer for permission to allow a third party to provide an investigative (or other) consumer report to the employer;" or the employer may "ask all current employees to sign a consent form, and provide them any required notice, at the same time;" and
• "To assist an employer ... to provide a copy of a report to an employee prior to adverse action, an investigative agency may draft its report to the employer to minimize risks attendant to such disclosure, most importantly by not naming parties that provide negative information regarding the employee."

We will continue to support efforts to alter the position taken in the Vail letter through the administrative and legislative processes as opportunities for input become available. I hope this information is helpful to you. If you have further questions, you may contact Assistant Legal Counsel Dianna Johnston, or attorney Corbett Anderson, respectively at 202-663-4657 and 202-663-4695.

Sincerely,

David L. Frank
Legal Counsel

cc: Carlton Hadden
Director
EEOC Office of Federal Operations

This page was last modified on April 27, 2007.