Can an Investigation into Employee Misconduct be Considered a "Consumer Report?"
Four portfolio managers of Allstate suspected of "suspicious trading" were fired after an internal investigation was conducted and unearthed email evidence that the managers might be timing trades to inflate their bonuses at the expense of the portfolios.
The former portfolio managers then claimed Allstate violated the FCRA and sued the company for defamation and violation of the FCRA. The initial plaintiffs were awarded statutory damages, punitive damages, and attorney fees at trial for the alleged violations by a jury, the Seventh Circuit vacated the verdict and dismissed the FCRA claims. Although Allstate did not raise the point, the court was skeptical that an investigation could be considered a consumer report if it was not conducted by a consumer reporting agency.
For additional information, please see: Terminated employees FCRA judgment damages, attorney fees vacated for lack of standing.