Appellate Court Considers the Illinois “Employee Credit Privacy Act”

Seyfarth Synopsis: On December 3, 2019, the Appellate Court of Illinois affirmed summary judgment in favor of a public utility company that considered credit checks for individuals applying for a customer service representative position due to an exception in the credit check law for positions involving “access to personal or confidential information.”

Introduction

In the last few years, much of what has been published has focused on employer use of criminal history background checks, including the process for obtaining such information under the Fair Credit Reporting Act (“FCRA”), consideration of criminal records under the Equal Employment Opportunity Commission’s 2012 Enforcement Guidance, and the myriad state and local ban-the-box laws sweeping the nation. A recent Illinois decision, however, serves as a reminder to employers that there are a handful of state and local laws that restrict their ability to order and consider credit history information for hiring and other employment decisions.

The Illinois Credit Privacy Act

The Illinois Credit Privacy Act generally prohibits employers from making any employment decision based upon an individual’s credit report or credit history. The Act also prohibits employers from obtaining a credit report regarding an applicant or employee, and from asking an applicant or employee about the individual’s credit history. There is, however, an exception in the Act when “satisfactory credit history” is an “established bona fide occupational requirement of a particular position or a particular group of an employer’s employees.” Establishing that the position or group has that “bona fide occupational requirement” requires the employer to show that “at least one” of the seven following circumstances is present:

• The employer is required by law to obtain bonding or other security for the individual in the position;
• Unsupervised access to cash or marketable assets valued over $2,500;
• Signatory power over business assets of $100 or more per transaction;
• Managerial positions that involve setting the direction or control of the business;
• Access to personal or confidential information, financial information, trade secrets, or state or national security information;
• The position meets criteria under any state or federal regulations that are designed to establish when credit history can be a bona fide occupational qualification; and/or
• The individual’s credit history is required by or exempt under federal or state law.

The Decision

In Rivera v. Commonwealth Edison Company, the plaintiff applied for a position as a customer service representative. After the employer rejected her for the position because of her credit history, she filed a class action lawsuit alleging a violation of the Act.

In its motion for summary judgment, the employer argued that the possession of a satisfactory credit history was a bona fide occupational requirement of the position because it “involves access to personal or confidential information” of the employer’s customers. According to the employer, the position for which the plaintiff sought employment required regular access to the employer’s customers’ Social Security numbers, dates of birth, bank account and credit card information, and driver’s license information, among other types of personal information. As such, the employer argued, the general prohibition on an employer’s investigating and considering a job applicant’s credit history in making hiring decisions did not apply to the customer service representative position at issue. The lower court agreed and granted the employer’s motion.

The plaintiff argued on appeal that (1) the information at issue was not “personal or confidential information,” and (2) the position at issue did not require actual “access” to such information, arguing instead that customer service representatives are simply “conduits” of the information between the customer and other employees. The appellate court disagreed.

On the first point, the Act defines “personal or confidential information” to mean:

sensitive information that a customer or client of the employing organization gives explicit authorization for the organization to obtain, process, and keep; that the employer entrusts only to managers and a select few employees; or that is stored in secure repositories not accessible by the public or low-level employees.

The appellate court rejected the plaintiff’s argument that she was only a “low-level” employee which, if true, would mean the information at issue could not be considered “personal or confidential information.” Because the term “low-level” was used in conjunction with the term “public,” the court concluded that to be “low-level employees,” they necessarily would need to have a similar level of access to the information at issue as the general public. The court found that the position plaintiff sought was not “low-level” “because it is undisputed that their need and ability to obtain and use the information of [the] customers to perform their job duties is much greater than that of the general public.” Having reached this conclusion, which necessarily brought the position under the exemption at issue, the court therefore found it unnecessary to consider the plaintiff’s remaining arguments as to the remaining, albeit independent, prongs of the definition of “personal or confidential information.”

On the second point, the court rejected the plaintiff’s contention that customer service representatives “are admittedly mere conduits entering information into the . . . database and nothing more.” The court found that “after initially inputting the information into [the system], [they] continue throughout their employment to have the ability to view at least partial Social Security numbers, driver’s license numbers, bank account numbers, and credit card numbers, in addition to customers’ names, address histories, dates of birth, and other identifying information” and that they “use this customer information routinely to assist customers as part of their job duties.” This was enough. As a result, the appellate court affirmed the lower court’s grant of summary of judgment.

Employer Considerations

At present, 10 states, Chicago, New York City, Philadelphia, Puerto Rico, and Washington, D.C. have laws that prohibit employers from requesting or considering an applicant or employee’s credit reports or other credit history information, unless an exemption applies. Some jurisdictions, such as California and New York City, set out a list of very specific positions that qualify for an exemption. Some, like Washington, however, merely say that credit information can only be used if “substantially job related.” Regardless, the recent Illinois decision is a good reminder to employers that request and consider credit information to ensure they are doing so in compliance with applicable law.