LinkedIn Hit With Class-Action Lawsuit For Its Job Reference Tool

The lawsuit accuses LinkedIn of violating the Fair Credit Reporting Act for supplying references to paid subscribers without users’ consent.

LinkedIn Hit With Class-Action Lawsuit For Its Job Reference Tool
[Photo: Flickr user]

A class-action lawsuit in California accuses the social network LinkedIn of violating federal consumer protection laws by selling users’ employment history to potential employers without their consent.

The lawsuit filed Thursday in a federal court in Northern California takes issue with LinkedIn’s job reference tool, which is available to employers who subscribe to its premium features. LinkedIn can generate reference reports that include the names, locations, and employment history of people who have worked with a given job seeker. The information in these reference reports, the lawsuit points out, could potentially be inaccurate. Applicants are not told when a potential employer runs a reference report.

The lawsuit states:

As such, any potential employer can anonymously dig into the employment history of any LinkedIn member, and make hiring and firing decisions based upon the information they gather, without the knowledge of the member, and without any safeguards in place as to the accuracy of the information that the potential employer has obtained.

Passed in 1970, the Fair Credit Reporting Act requires parties to let a person know when a consumer report is used to deny his or her application for employment, insurance, or credit. Furthermore, consumer consent is required in instances where potential employers pull such reports from a reporting agency. The suit will hinge on whether publicly traded company LinkedIn is considered a consumer reporting agency. The four plaintiffs named in the suit are suing for statutory and actual damages.

About the author

Based in San Francisco, Alice Truong is Fast Company's West Coast correspondent. She previously reported in Chicago, Washington D.C., New York and most recently Hong Kong, where she (left her heart and) worked as a reporter for the Wall Street Journal.