FCRA Preempts Employee's Defamation and Tortious Interference Claims Against Employer Who Gave Negative Reference to Consumer Reporting Agency

On Tuesday, the Sixth Circuit affirmed an employer’s summary judgment on a defamation and tortious interference claim brought by a former employee who claimed that he had been defamed and prevented from obtaining new employment based on a negative job reference that the defendant employer provided to a consumer reporting agency.   McKenna v. Dillon Transp. LLC, No. 23-5568 (6^th Cir. 4/2/24).  The Court agreed that the plaintiff’s state law claims were pre-empted by the Fair Credit Reporting Act.   The Court rejected the plaintiff’s argument that a similar federal statute governing employment/safety references of commercial drivers provided liability for his claims because it did not specifically pre-empt the FCRA and was compatible with it. 

According to the Court’s opinion, the defendant employer provided information to a consumer reporting agency about the plaintiff after he was fired following an accident in which his tractor trailer overturned.  The agency provides information about drivers to employers who inquire about hiring that driver, but there was no evidence that anyone had ever inquired about the plaintiff.  The plaintiff then sued the employer for defamation and tortious interference, blaming its report for his inability to find another job.  The trial court granted summary judgment to the employer on the grounds that state law claims were preempted by the FCRA.

The Court observed that it had previously held that § 1681t(b)(1)(F)of the FCRA “preempts state common law claims involving a furnisher’s reporting of information to consumer reporting agencies.”  The plaintiff argued that a different federal statute applied.  The DOT requires employers to investigate a driver’s safety record before hiring and the governing statute likewise pre-empts state laws that impose liability upon employers for providing such information.  However, unlike the FCRA, the transportation statute does not exempt employers who knowingly provide false information about a driver’s safety record.

The Court rejected the plaintiff’s argument on a number of grounds.  First, there was no evidence that any employer had requested information about his safety record, which would be necessary to implicate this statute.  Second, it was questionable whether the defendant employer’s statements were “knowingly” false, rather than merely negligently false.   Finally, the Court did not find the transportation statute to necessarily repeal or be inconsistent with the FCRA.  “The two preemption statutes here complement each other, so they can coexist.”

15 U.S.C. § 1681t stops states from regulating false reports to consumer reporting agencies, including agencies that provide background checks. 49 U.S.C. § 508 blocks specific causes of action against those who answer a motor carrier’s request for employment information. One regulates the consumer reporting industry. Another regulates the hiring of commercial drivers. The statutes have different textual purposes and scopes, and neither swallows the other. Communications between motor carriers about driver applicants would only fall under § 508. And only 15 U.S.C. § 1681t would cover cases without a request for records or an individual under consideration for employment. That the FCRA is a more general law that covers more conduct than 49 U.S.C. § 508 doesn’t change this. Greater specificity only matters if two complementary acts cannot be implemented at the same time. . . .  And the statutes do not conflict—one simply provides more protection for companies in Dillon’s position. So we give both statutes full effect rather than resorting to the specific-general canon. Dillon can invoke one preemption clause even if it cannot invoke the other.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Ohio Appellate Court: National Bank Act Pre-empts Ohio Discrimination Claim, But Question Exists Whether Board Properly Terminated Plaintiff under NBA

Late last month, the Summit County Court of Appeals held that the National Bank Act pre-empted the state law gender discriminatory treatment claims of a discharged business banking officer, but not her state law retaliatory discharge claims. Boesch v. Champaign National Bank, No. 2008-Ohio-3282 (6/30/08). While the undisputed evidence showed that the plaintiff was a bank “officer” who was appointed by the bank’s board of directors, there was an evidentiary question as to whether she was discharged by the bank’s president or the board because of the manner of preparation and presentation of the board’s minutes and an amendment concerning her termination.

The Court recognized that the power granted to banks by the National Bank Act “to appoint and dismiss officers at ‘pleasure’ conflicts with the Ohio statutory provisions precluding employment discrimination and retaliation.” While the National Bank Act, 12 U.S.C. § 24 (Fifth), gives national banks the power: "[t]o elect or appoint directors, and by its board of directors to appoint a president, vice president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places, " the Ohio Civil Rights Act State Act, O.R.C. § 4112.02(A), in contrast provides that “ it is an unlawful discriminatory practice: [f]or any employer, because of the race, color, religion, sex, national origin, disability, age, or ancestry of any person, to discharge without just cause, to refuse to hire, or otherwise to discriminate against that person with respect to hire, tenure, terms, conditions, or privileges of employment, or any matter directly or indirectly related to employment.” Moreover, “[w]ith respect to retaliation, state law provides that it is an unlawful discriminatory practice: [f]or any person to discriminate in any manner against any other person because that person has opposed any unlawful discriminatory practice defined in this section or because that person has made a charge, testified, assisted, or participated in any manner in any investigation, proceeding, or hearing under sections 4112.01 to 4112.07 of the Revised Code."

The court was faced with deciding whether the National Bank Act preempted state law under the constitution’s supremacy clause and recognized that the Sixth Circuit regularly recognized this preemption. Because the plaintiff had been properly hired by the bank president with authority from the bank’s board of directors and the decision was properly ratified by the bank’s board, the court found that the evidence showed that she was a bank “officer” covered by the National Banking Act. Therefore, the court concluded that her state law discrimination claims were pre-empted by federal law.

However, the Court also concluded that there was an evidentiary question as to whether her discharge was authorized and/or ratified by the bank’s board of directors. The bank’s president discharged the plaintiff and during litigation submitted an affidavit asserting “that the bank's board of directors terminated [plaintiff] and that such action is reflected in an amendment to the minutes of the meeting in which the board made that decision.” The plaintiff questioned the authenticity of the board minutes because “the amendment was undated and dealt with no other bank business . . . [and the bank] did not provide the original minutes of the board's meeting. She alleges that the amendment appears to have been created for litigation purposes and concludes that there is a question as to whether the ratification was "prompt" and appropriate under the NBA.” The Court agreed that these were valid evidentiary issues for a jury to resolve. Moreover, the court was “unable to determine from the record whether the board had delegated its authority to Lamping to terminate Boesch. . . . [raising] the issue of whether [plaintiff’s] termination was accomplished by the board of directors, or whether it was an individual action” by the bank president.

Insomniacs can read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/9/2008/2008-ohio-3282.pdf.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.