Employers face a six-year statute of limitations on criminal background check claims | McGuireWoods LLP

On January 12, 2023, the US District Court for the District of New Jersey ruled Ramos vs. WalMartinc that Pennsylvania plaintiffs have up to six years to bring criminal history abusive claims against employers under Pennsylvania’s Criminal History Record Information Act (CHRIA).

Plaintiffs alleged that Walmart violated CHRIA by refusing to hire them based on a criminal history unrelated to their fitness for employment. They advocated a six-year discovery period based on Pennsylvania’s six-year catchall statute of limitations, which applies to all claims that are “not subject to any other statute of limitations … nor barred from the application of any statute of limitations.”[.]” 42 Pa. CSA § 5527(b). Walmart resisted, arguing that the Pennsylvania two-year statute of limitations for tort should apply.

The district court, which predicted the Pennsylvania law, agreed with the plaintiffs. It dismissed Walmart’s arguments that the CHRIA concerned only tortious conduct, noting that “plaintiffs may have claims [under the CHRIA] analogous to various common law causes of action in Pennsylvania, more than just those that sound like tort.

Although the court did not elaborate on what those pleas in Pennsylvania were, it did cite Taha vs. Bucks County Pennsylvania, in which the US District Court for the Eastern District of Pennsylvania also applied a six-year statute of limitations. The Taha The court reasoned that a broader general statute of limitations was appropriate given the variety of requirements that CHRIA places on criminal justice agencies, regulatory agencies, private employers and others.

Although the case did not analyze the issue, it served as a reminder to employers that CHRIA provides that “[f]Elonie and misdemeanor convictions can only be taken into account by the employer to the extent that they relate to the suitability of the applicant for the position for which he has applied.” 18 Pa. CSA § 9125(b). CHRIA does not specify how an employer should determine whether a conviction is “related” to an applicant’s suitability for employment. CHRIA, like the federal Fair Credit Reporting Act, also includes procedural reporting requirements when an employer makes an adverse hiring decision based on a criminal background check.

Successful CHRIA plaintiffs may seek actual damages, with a statutory minimum of $100 per violation, plus attorneys’ fees, costs, and punitive damages of no less than $1,000 or more than $10,000 for intentional violations. More generally, as evidenced by the ramos Complaint, CHRIA plaintiffs (and others claiming work-related damages based on criminal background checks) may seek to represent other aggrieved individuals through class action lawsuits.

Although the CHRIA was enacted more than 30 years ago, lawsuits were rare until recently, when employer background screening policies have come under increased scrutiny by the Equal Employment Opportunity Commission and state legislatures. The CHRIA’s broad language and substantial penalties make it a particularly popular target for plaintiffs’ attorneys – in the Taha In this case, for example, a jury awarded the class approximately $68 million. The ramos The court’s recent ruling will only add to those incentives, and litigation in other states is likely to continue to escalate given the patchwork of differing state and local restrictions on employer use of criminal records and credit reports. Employers should continue to monitor developments in this area and assess their background check processes accordingly.