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Need Legal Advice on Employment Offer Rescinded Due to Credit.

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Hi, first post. Hopefully some of the lawyers knowledgeable in credit law and employment law can help me here.

I received a written employment offer from a large corporation in TX. I was ready to go (they had already sent me the relocation credit card and everything) and then the offer was just rescinded due to my credit history. The headhunter the company used told me this over the phone, and he told me the name of the company they used as a CRA to obtain the report and that they said my report had too many negatives. Then, he sent me an email from himself that only had the name and address of the CRA, nothing else.

The next day I called HR, after I pulled up a copy of my credit report from that CRA on my own through their website, to find out what their hiring policy was regarding credit history. He confirmed to me that my offer has been rescinded, and he told me that an applicant has to have less than $3000 in collections or charge offs and no more than 3 collections or charge offs. Then he sent me an email that told me where to send the relocation card back to. That's it.

I understand that an employer can use credit as a factor in making hiring decisions, but my problem really relates to the method they used, which I do not believe was following the federal FCRA law for pre-adverse actions in employment based on credit.

This is what I have found on my own Googling:

"Before the adverse action is taken, the employer must give the applicant a "pre-adverse action disclosure." This includes a copy of the report and an explanation of the consumer's rights under the FCRA.

After the adverse action is taken, the individual must be given an "adverse action notice." This document must contain the name, address, and phone number of the employment screening company, a statement that this company did not make the adverse decision, rather that the employer did, and a notice that the individual has the right to dispute the accuracy or completeness of any of the information in the report."

I did not get from them a copy of the report they used, or an explanation of my FRCA rights. In fact, I received no written pre-adverse action notice whatsoever.

For the after-adverse action, I only received the name, address and number of the CRA. Nothing else, no statement, no right to dispute notice, and certainly nothing in writing other than the CRA's name and address in an email from the headhunter.

Also, I checked my copies of the hiring and employment docs I signed (pre-written offer). There is no language in the application or otherwise that waives any of these rights, just language that authorizes them to pull my credit report and use that as a decision for hiring. Don't know if that means anything, though.

So, my question is, does it seem like this employer has violated the FCRA (in pre-adverse and post-adverse) and if so, what remedies do I have? Are they liable to me for damages and if so, what would they be? The salary of the position or just a small fine? What should be my next action?

I greatly appreciate any advice and help. Thanks!

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Write 'em a nice letter and suggest that they reinstate the offer because they did not follow proper procedure, which is in place for the purpose of allowing the applicant to explain his or her credit history and point up any discrepancies. Separately, ask the headhunter to go to bat for you. Although the headhunter's loyalties lie with the company, the headhunter often is "pulling for" you (since they're often competing with other headhunters). The headhunter is also very anxious not to appear to have misled anybody, and you can claim to have been misled by the company to the headhunter and potentially claim to the company that the headhunter misled you, which would be death for the headhunter with that company. Turn their politics against them.

At the end of the day, what you want to have happen is them decide you're an OK guy they need to make an exception for so that nothing blows up in their faces.

I think you have a good shot at doing that if you portray yourself as an honest person with a couple of spurious (or explainable) negatives on your file who didn't get handled properly and has made some life changes in anticipation of getting the job which should not get yanked back because they didn't follow proper procedures.

It's a fine line to have to walk ... but remember, your immediate hiring manager wanted you too, and this is crap coming from HR that is messing with his life. If he has some procedural ammo, he may be able to get them to waive it.

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Thank you, FlaCorps. That is some advice I will consider. One of the steps I have already decided to take (before I made the original post) is to try to get the job back first by either paying off some of the charge offs quickly or explaining some of them to HR.

However, in the event that getting the job back does not work, I also needed to know if the federal or state law allows me some recourse that would be worth my time.

Using your method would be a delicate situation that I might not want to try without first getting the advice of an attorney or someone. I would have to make sure the letter is worded just right.

So, is there any advise on the recourse I'd have in the event I can't get the job offer back?

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The bottom line is do you feel strongly enough about what happened to retain an attorney and file a lawsuit. If you are willing to do that, then look for a good lawyer. I don't think you will get far by yourself. The moment you push back on this, they will engage their legal team.

You'll also want to look into case law on this. Since you signed the form allowing them to pull your credit, you were fully aware that your credit history would play a part in their hiring decision. Now, did they follow procedure to the letter of the law? Probably not, but, again, how far are you willing to pursue this? When you read the law, there is a huge gray area concerning time between the "before adverse action" and "adverse action."

If they decided to rescind the offer at 9:00 am, were they supposed to provide the credit report and disclosure statement before they called to tell you at 10:00 am? Then, after they called you at 10:00 am, were they supposed to provide all of the other stuff?

These are questions for an attorney to muddle through.

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JMO - I would first nicely ask for a reconsideration.... if you go talking about what they didn't do then you are certainly NOT going to be hired since the light you will be seen in is a "troublemaker" and no company wants that....

Then I would pass this by an attorney who deals with employment issues.... next stop would be a credit attorney....

I can understand how upsetting this is for you and hope that you can work something out....

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My first step is trying to get my job offer back through quickly fixing enough of the bad things on my credit report (or having proof that I paid or settled them). But I am also trying to talk to a really good employment lawyer who knows federal credit law to go to the next step just in case that does not work. In the next step, I would like the attorney to help me draft the letter that FlaCorps first suggested (the letter with the subtle hints that I know that they violated the law), and this obviously has to be done soon, since time is of the essence. This job would have been a very well-paying job, so I do not just want to go away without fighting for it, especially in an economy as bad as this one.

Here's the letter I sent yesterday. This hopefully is just the beginning:

Monday, April 7, 2008

Big Company

Attn: Joe Blow

123 Business Drive

Big City Texas

Dear Joe:

Per my conversations with John Headhunter and Jim Human Resources last Thursday and Friday respectively, regarding Big Company's decision to rescind my offer of employment due to credit history, I am hereby forwarding to you the American Express Corporate Relocation Card.

I am currently reviewing my credit report which I retrieved on my own, and disputing any inaccuracies with the reporting agencies. I maintain that, in spite of a few spurious or even explainable marks on my report, I am an honest, well-qualified candidate with strong ethics who would make great contributions to your team. I sincerely hope that Big Company will provide me with a timely opportunity to challenge or appeal the decision of rescission.



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The headhunter just told me in a phone conversation that I'm the third person in that department this year who has been turned down for these vacant positions for the very same reason! So, I would think this large corporation would already know the proper and legal way to handle such a matter, all things considered.

To me, that sounds like a good case against the company for "willful noncompliance" of the law, which mean the punitive damages could be much, much higher. Especially for a company this size.

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Solace, did you sign any type of paperwork or agreement with the headhunter? Your situation is complicated by the having the headhunter in the middle. I'm sure the company will try to push some of the responsibility of proper notification onto the headhunter and claim it was their responsilbity to provide the credit report and other documentation needed to comply with the law.

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I signed nothing with the headhunter at all. The only docs I signed have come from the big company. In fact, I've never even met the headhunter. He called me out of the blue one day to recruit me for this position.

Even if the company tried to use the headhunter to do the dirty work of telling me that the offer has been rescinded, that means the headhunter was acting as an agent of the corporation and therefore, the corporation still bears corporate responsibility for his actions.

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OK, I am still looking for a good employment lawyer who is licensed in TX so I can get his or her advice before I fire off any communications to the Big Company making them aware that I know they violated the FCRA. But in the meantime, I did speak with a good friend who is a hiring manager at a large corporation and he gave me a very different perspective on this whole matter.

He told me that he thinks it would not be in my interests at all to disclose anything to the headhunter, because the headhunter is more concerned with his relationship with Big Company, who he does a lot of business with. He suggested that since the headhunter was involved in the failure to follow federal law, that that he could become much more cooperative with the company to provide them with any leads about what my strategy would be or even a coverup for the company. He said that he has seen this before, and his policy is to never trust the headhunter if they have a contract with the company.

Also, he said do not trust that the company will "do the right thing" in re-extending me an offer, or will act in good faith with me since they apparently did not act in good faith by breaking the law and violating my right to due process by not giving me a "pre-adverse action notice" before rescinding my offer. He said that you do not know what the real reason that they rescinded their offer to you was. He said that the "credit history" could be a phony reason they are using to kick you out of the job for another, more nefarious reason (he said that as a hiring manager, he has seen that happen several times. As an example, if someone is in a "protected class", such as age, national origin, religion or disability, the company might want to make up a legal but bogus reason in order to cover up for the discrimination.) He says that on its face, the "credit history" reason sounds bogus, and uses the fact that they never provided me with a copy of the credit report, or that, when confronted, the HR rep could not verify to me what their exact credit policy in hiring was! He basically said, "how do you know that they are even telling you the truth? That they even pulled your report?", and strongly suggested to me that I immediately cease any communications with either the company or the headhunter until I speak to an attorney.

Then, he said that instead of sending them a nice letter gently telling them I know about their violations of the law but I only want my job back, that what I really should do is have my attorney send a letter and be unequivocal about my position that the company violated the law and that I intend to sue and seek unlimited, high-end punitive damages for their willful violations of the law. Do not tell them that you just want your job back, he says; first of all, the job is gone and you cannot trust this company or its headhunter to go to bat for you anymore. The headhunter told you that the hiring manager loves you and is disappointed about this whole matter, but how do you know this is true? Just because the headhunter told you this? The same headhunter that participated in violating federal law with the company? As far as you know, my friend says, the company might already know they broke the law, and are just trying to cover it up or hope you are not smart enough to figure that out.

So, in a nutshell, as a hiring manager, his perspective is: the less I interact with this company or any of its agents, the better. Then, have an attorney fire off the letter, or at least, send off a letter that my attorney has reviewed. He thinks that once any communications notifying the company that the law was broken is received by the company, that it'll run up the corporate flagpole and the company will get all legally prepared, or possibly even cover their dirty trracks. so it's best not to raise anything like that until you're ready to deal with them on that legal level. Remember, this is a billion-dollar company and I'm just one person, so I need to come at them with guns blazing, he said. You cannot appeal to their sensitive side and ask for reconsideration at this point. Your federal rights have been violated, they will know they are in the wrong, and they will soon ask you what it is you want to make this disappear. THEN, he says, see about the job, if you so choose. (But he says he would go for a settlement instead, because at this point, you really can;t trust this company to handle you fairly upon employment). They would most likely not offer you the job back anyway without getting you to sign an "agreement not to sue", so the job and the suit are two issues that, from this point on, go hand in hand.

OK, so that is a totally different perspective, but defintely one to consider. He does seem to make some very good points.

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Definitely don't go to work for them if the job is a lawsuit settlement. They'll fire you later for stealing pencils that didn't even exist....

But are you a member of any protected class?

If the industry is too large and fragmented for you to get blackballed, you may want to go the litigation angle...

Tracks aren't that easy to cover ... e-mail seldom disappears, and when it does there's hell to pay.

But the hiring manager may know best ... I wouldn't do anything at this point without seeing an attorney.

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Yeah, it looks like they did pull it. It says the date and everything. But that still doesn't mean that was the underlying reason for the rescinding of the offer. And it still doesn't absolve them from following the laws set out by the FCRA.

I just spoke to a very good employment lawyer in TX who also knows the FCRA well, and did a similar case like this last year. He thinks that so far, I have a great case against them and that he told me not to communicate with either the headhunter or anyone at the company until we get this demand letter fired off to them, which will probably be by Monday. So, it looks like I'm off to the races!

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  • 6 months later...
Yeah!!!! Good For You!!!! Hopefully you will keep us posted.... but be very careful of what you post since some of these post can find their way into a courtroom ... maybe have your attorney look over your post here....


Settled with the Big Bad Corporation for mid 5 figures. Got the check a while ago. Pretty happy with it. They know they were wrong as hell!

Thanks all for your help and insight. I hope none of you EVER have this problem.

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That's a good end result.

Did you ever find out what the real reason was for the retraction? There could be a ticking time-bomb out there someplace that could get you again (like a bad reference from a former manager).

No, and I know it's not references because those are impeccable, including from owners and presidents of companies I worked for. And since then, I've been offered two good jobs, one of which I am on now, so it all worked out in the end.

As part of the settlement, the Big Bad Corporation admits to no wrongdoing, and I am not able to discuss my application of employment with that company with anyone. So, in my opinion, they got off easy.

But like I said, I think they saw the large unpaid medical collections (due to my disability) on my credit report, thought the worst, and used that against me, but they will never admit that because that is discrimination. In any event, it has alerted me to try to clean up my credit to the best of my ability. The funny thing is that since this has happened, I have been able to clean up my credit to the point where my score has gone from in the 400s to the high 500s, only in a few months. A lot of it is due to the info from this message board, so thanks to all!

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