The social media pre-employment case we’ve been waiting for

From our many conversations with Consumer Reporting Agencies (CRAs) and employers, the elephant in the room is the lack of case law governing the use of social media for employment background checks. However, a class action lawsuit filed against LinkedIn in October may be about to change that.

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An example of a LinkedIn Reference Report from the Sweet v. LinkedIn lawsuit.

The four plaintiffs in the class action lawsuit Sweet v. LinkedIn argue that they were denied employment based on LinkedIn’s subscription-based reference search feature, which allows potential employers and other premium users to anonymously generate a Reference Report on any LinkedIn user. This report shows employers how to contact a job candidate’s previous bosses and coworkers, but LinkedIn does not vet these “trusted references” or notify potential employees that these reports are being created.

The plaintiffs argue that allowing employers to make hiring and firing decisions based on such a report without the knowledge or consent of the potential employee is in direct violation of the Fair Credit Report Act (FCRA).

The outcome of this case will likely have an impact on how employers and CRAs can leverage social media and open source intelligence for pre-employment purposes.

The case must resolve three important questions:

  1. Is LinkedIn a CRA?

    If it is, it must follow the rules set forth by the FCRA. How would that decision impact sites like Angie’s List and eLance where more individuals work part-time as contractors and consumers often make “hiring” decisions based on third party representations online?
  2. Is LinkedIn selling information or is it selling technology that offers information?

    Even if companies are only selling access to a platform, it is up to the courts to decide if they – or the employers who use the platforms – are violating the FCRA by not informing potential employees of how personal and professional information is being used.
  3. What constitutes public domain on the internet?Depending on how the court answers this question, companies like LinkedIn may have to seek candidate approval before selling this information to employers, even if candidates make it publicly available.

In general, where is the boundary between recruiting using social media and conducting a social media background check? Almost all hiring departments trumpet their use of LinkedIn and the internet for passive recruiting. Isn’t the very fact that one selects one person over another based on their LinkedIn profile a de-facto social media background check? The fact that LinkedIn can be used in both roles makes this case very interesting.

What are your thoughts? Let us know in the comments!

Find out more about SMI’s pre-employment social media investigation services.

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