Labor & Employment Law Daily Wrap Up, PRIVACY—W.D. Tex.: Job applicant’s FCRA claims proceed against employer based on inaccurate FBI criminal history report, (Sep 29, 2025)

By Steven D. Cole, J.D.

The employer’s motion to dismiss was denied in a suit alleging FCRA violations arising from the rescission of a job offer that was based on an inaccurate FBI criminal history report.

A job applicant can move forward with his claims that a bank violated provisions of the Federal Credit Reporting Act (FCRA) when it rescinded a job offer due to inaccurate information gathered in a background investigation, held a federal district court in Texas. The FBI criminal history background report (FBI Report) listed a 2011 “incident” that the applicant claimed had been expunged from his record. The court denied the bank’s motion to dismiss because there were unresolved factual issues regarding whether the FBI Report and the consumer reporting agency’s report should be considered separate documents. Further, the bank did not show that the consumer reporting agency that it used, was exempted from the FCRA’s regulations as a mere conduit of information. Finally, the court dismissed the applicant’s claim under 15 U.S.C. § 1681m, since this type of action can be enforced only by certain federal agencies and officials (Debeikes v. Frost Bank, No. 5:25-CV-00373-JKP (W.D. Tex. Sept. 23, 2025)).

Job applicant. On February 12, 2025, following a three-month interview process, the bank extended an offer of employment to the job applicant, conditioned upon the successful completion of an FBI fingerprint-based criminal history background check. The applicant consented to obtaining a consumer report, including the FBI Report. The next day, the bank rescinded its employment offer, citing information contained in the FBI Report. The applicant independently requested his own FBI Report and subsequently had a 2011 incident removed from the Utah Department of Public Safety database. This resulted in a clear background check on February 18, 2025, thereby confirming the FBI Report’s inaccuracy.

The applicant alleged in his amended complaint that Frost violated 15 U.S.C. § 1681b(b)(3) by using the FBI Report, obtained through a consumer reporting agency, to rescind his job offer without providing a pre-adverse action notice, a copy of the FBI Report, or a summary of FCRA rights.

Was FBI report part of consumer report? The applicant alleged that the consumer reporting agency included the FBI Report as part of its consumer report. The bank countered that these constituted separate reports, and that the FBI Report, on its own, did not qualify as a “consumer report” under the FCRA’s definition in 15 U.S.C. § 1681a(d). At this stage in the litigation, genuine issues of material fact persisted with regard to this issue.

Was consumer reporting agency subject to FCRA? The bank contended that the consumer reporting agency functioned as a mere “FBI-approved channeler” of criminal history information between the FBI and the bank and, as such, was not subject to the FCRA, citing Mix v. JPMorgan Chase Bank, NA, No. CV-15-01102-PHX-JJT, 2016 U.S. Dist. LEXIS 139095 (D. Ariz. Oct. 6, 2016) (finding at the summary judgment stage that a particular background check company did not meet the FCRA’s definition of “credit reporting agency,” citing the bank’s abundant evidence that the company acted as mere a conduit of information). In this case, however, the bank did not provide the same type of copious evidence as did the defendants in Mix.

The fact that the FBI is not a consumer reporting agency is immaterial. The court agreed with the bank’s assertion that the FBI does not meet the FCRA’s definition of “consumer reporting agency.” This argument was inapposite to the relevant issues, however, because the applicant alleged that the bank obtained the FBI Report through the consumer reporting agency, not the FBI itself.

Disqualifying information. According to the bank, it could not have taken any adverse action based on a “consumer report” from a “consumer reporting agency” because any such report from the agency contained no disqualifying information. This argument was premised on the bank’s contention that the inaccurate FBI Report was distinct from the agency’s consumer report. However, given “the inconsistencies in labeling the various documents” submitted by the applicant, a pro se plaintiff, and that the applicant specifically alleged that the FBI Report constituted a “consumer report” under 15 U.S.C. § 1681a(d), the court concluded that it was “not implausible [that] the combination of documents provided from Sterling may fall within the FCRA’s definition of a consumer report.”

Individual cause of action. The job applicant claimed that the bank violated other FCRA provisions as well, including 15 U.S.C. § 1681m. The court dismissed this claim sua sponte since this particular provision may be enforced “exclusively under [Section 1681s] by the Federal agencies and officials identified in that section.” 15 U.S.C. § 1681m(h)(8)(B).

Therefore, the court denied the bank’s motion to dismiss and ordered the applicant to file a response, if any, regarding its notice of intention to dismiss the Section 1681m claim no later than Friday, October 3, 2025.

The case is No. 5:25-CV-00373-JKP.

Judge: Pulliam, J.

Attorneys: Daniel Matthew DeBeikes, pro se. Daniel R. Atkinson (McGinnis Lochridge) for Frost Bank.

Companies: Frost Bank; Frost Insurance Agency Inc.

Cases: Privacy CoverageLiability TexasNews