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What Every Employer Should Know About Their Duties Under FCRA and FACTA

Employers who are made aware of a discrimination, harassment, or workplace violence claim by one of their employees must act quickly to address it. First, the employer should take steps to assure the employee who has come forward that he or she will be protected from adverse action based upon the reporting of misconduct. This is especially important when the misconduct stems from a supervisor of the employee. Second, the employer is under an obligation to investigate the truth of the accusations and take appropriate action. This is often when the employer will choose to hire a third-party workplace investigator, such as The Lynch Law Firm. When your business is facing claims of workplace misconduct, we understand the importance of thorough and discrete investigation.

When an investigation is done prior to employment, the employer and any third-party investigator must abide by the Fair Credit Reporting Act (FCRA). In pre-hiring situations, the FCRA requires that an employer notify the job applicant and obtain permission to investigate them. However, there is a lesser-known statute known as the Fair and Accurate Credit Transactions Act of 2003 (FACTA), which was enacted to modify the FCRA. In situations where an employer is dealing with workplace misconduct, the FACTA allows the employer and investigator to bypass the consent and notice requirements normally imposed by FCRA and to investigate an employee without their prior knowledge.

However, an employer and its third-party investigator will still have certain duties under FACTA in these circumstances. If the investigator’s report provides information to the employer which then results in an adverse employment decision against the accused employee, that employee must be provided with a summary of the investigator’s report. Although FACTA does not specifically require that the report be in writing, an oral summary is not recommended because it could be difficult to prove that a summary was given at all. Instead, an employer should be careful to provide this report in written form, even though it may be very brief. FACTA is not specific as to how detailed the information must be, only stating that the employee is to receive “a summary containing the nature and substance of the communication upon which the adverse action is based.” 15 U.S. Code § 1681a(y)(2). Generally speaking, the report should inform the employee of the results of the investigation and the information those results were based on, but should not disclose names of the persons the investigator spoke with or specifically what those sources told the investigator.

Remember that an employer’s duty to provide a summary of the investigator’s report only arises if and when the employer decides to take adverse employment action. If an investigator’s report clears an accused employee of wrongdoing, that employee never needs to know that they were the subject of an investigation. The Lynch Law Firm always has discretion in mind when conducting an investigation, and will take the necessary steps to promote confidentiality during investigations to the maximum extent permitted.

Cite this article: Lynch, N. (2017). Workplace Investigations: What Every Employer Should Know About Their Duties Under FCRA and FACTA. Available: