How confidential is employee credit information?

What is an employer allowed to say about an ex-employee? Are they allowed to release salary information, grade point averages or personal credit information to a potential employer? How do you stop bad references? If you authorize an employer to do a background search (credit reports) etc. can they, after you are hired, release this information to co-workers or owners of the company that pass the info to co-workers? (New York City)

Rita Risser's response:

Under the Fair Credit Reporting Act (15 USC 1681 et seq.), employers are allowed to ask for and use credit information only for "employment purposes," which is defined as "evaluating a consumer for employment, promotion, reassignment or retention as an employee." The FRCA also provides that credit reports must be kept confidential.

It sounds like your employer violated the confidentiality rule because they told people about your report who did not have a need to know. In addition to suing under the FRCA, you also may be able to sue for common law invasion of privacy, intentional infliction of emotional distress, or slander. If you are in California, there is a California Consumer Credit Reporting Agencies Act which also requires confidentiality.

Other than the Fair Credit Act, there is a common law right to privacy that prohibits any person from revealing personal information. However it is not clear if salary information or grade point average would be considered personal, or whether it would be considered directly related to employment and therefore could be shared with potential employers.

How do you stop employers from giving bad references? You can threaten them with a lawsuit - but that might make it worse. I suggest working on it from the other side. Tell potential employers you have had a personality conflict with your ex-employers. That way they will know to expect a bad reference andwon't be surprised if one is received.

Disclaimer: This information is provided with the understanding that the author and publisher are not engaged in rendering legal or other professional services. The publishers disclaim any liability, loss or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this information. This information is not a substitute for the advice of a competent legal or other professional person.