LinksLinkedIn has achieved remarkable market penetration among lawyers.  Ninety-five percent of ABA members report that they have profiles. (Preceding link requires LEXIS subscription.)   Many law firms turn to LinkedIn’s premium offering, “Reference Search,” to help them vet job candidates by finding references — others who have worked with candidates at their former firms.  But does LinkedIn violate the federal Fair Credit Reporting Act by providing this information to employers?

Last week, in an opinion dismissing a putative class action, a California federal magistrate judge answered that question “No,” saying that the results of LinkedIn reference searches are not “consumer reports” under the FCRA, and that LinkedIn is not a “consumer reporting agency” under the statute.

The named plaintiffs in the case (none of them lawyers) alleged that the reference searches caused them to lose job opportunities, and that the protections of the FCRA should apply whenever LinkedIn provides Reference Search results to potential employers.

How “Reference Search” works

When a premium subscriber runs a Reference Search on a LinkedIn member, the results list the current and former employers of the search subject.  Also listed are LinkedIn members who have worked at the same company at the same time as the job candidate, together with their job titles and the years when they worked for the common employer.  This allows the employer — a law firm, for example — to reach out to the references and, as LinkedIn says in its marketing materials, to “[g]et the real story on any candidate” and to “[f]ind references who can give real, honest feedback” about job candidates.

Not a “credit report” 

The protections of the FCRA only apply when “credit reports” are involved.  The magistrate judge found that the class action plaintiffs hadn’t plausibly alleged that the Reference Searches fell within the statute’s reach.

First, the court said, the Reference Search results are not credit reports because the employment history information comes solely from  LinkedIn members themselves.  The FCRA excludes from the definition of “consumer report” any report that contains information only “as to transactions or experiences between the consumer and the person making the report.”   Here, the court said, members voluntarily participate in LinkedIn to “create, manage and share their professional identities online,” and the reference results are generated based on the interactions between LinkedIn and the job candidate.  That puts the reference results within the exclusion, the court held.

The magistrate judge also compared the data aggregated by LinkedIn to a phone book, saying that “[a]s LnkedIn notes, the fact that a potential employer could use a telephone directory [of employees at] a job candidate’s current employer to contact people who know the candidate does not make that directory a consumer report.”

The magistrate judge also found that LinkedIn was not a “credit reporting agency” under the FCRA, further shutting the door against plaintiffs’ class action claims.

Leave to amend

The court was “not yet persuaded” that the defects in the class action complaint were beyond cure, and granted leave to amend no later than May 19.  So stay tuned.  For now at least, it would appear that the protections of the FCRA don’t apply when law firms use LinkedIn’s Reference Search to check out potential hires.