Employers Face Six-Year Statute of Limitations for Criminal Background Check Claims

February 1, 2023

On Jan. 12, 2023, the U.S. District Court for the District of New Jersey held in Ramos v. WalMart, Inc. that Pennsylvania plaintiffs have up to six years to file claims against employers for improper use of criminal history under Pennsylvania’s Criminal History Record Information Act (CHRIA).

The plaintiffs alleged that Walmart violated the CHRIA by declining to hire them based on criminal history that was unrelated to their suitability for employment. They advocated for a six-year discovery period based on Pennsylvania’s six-year catchall statute of limitations, which is applicable to any action that is not “subject to another limitation … nor excluded from the application of a period of limitation[.]” 42 Pa. C.S.A. § 5527(b). Walmart resisted, arguing that Pennsylvania’s two-year statute of limitations for tortious conduct should apply.

The district court, predicting Pennsylvania law, agreed with the plaintiffs. It rejected Walmart’s arguments that the CHRIA exclusively concerned tortious conduct, finding that “plaintiffs may bring claims [under the CHRIA] analogous to various Pennsylvania common law causes of action, more than simply those sounding in tort.”

Although the court did not elaborate on what those Pennsylvania causes of action were, it cited Taha v. Bucks County Pennsylvania, in which the U.S. District Court for the Eastern District of Pennsylvania similarly applied a six-year statute of limitations. The Taha court reasoned that a broader catchall limitations period was appropriate based on the variety of requirements the CHRIA imposes on criminal justice agencies, licensing agencies, private employers and others.

While the case did not analyze the issue, it did serve as a reminder to employers that the CHRIA provides that “[f]elony and misdemeanor convictions may be considered by the employer only to the extent to which they relate to the applicant’s suitability for employment in the position for which he has applied.” 18 Pa. C.S.A. § 9125(b). The CHRIA does not specify how an employer should decide whether a conviction is “related” to an applicant’s suitability for employment. The CHRIA, like the federal Fair Credit Reporting Act, also includes procedural notification requirements if an employer makes an adverse employment decision based on a criminal background check.

Successful CHRIA plaintiffs can recover actual damages, with a statutory minimum of $100 per violation, plus attorneys’ fees, costs, and punitive damages of not less than $1,000 or more than $10,000 for willful violations. More generally, as evidenced by the Ramos complaint, CHRIA plaintiffs (and others alleging damages from employment denials due to criminal background checks) can seek to represent other aggrieved individuals through class cases.

Although the CHRIA was enacted more than 30 years ago, lawsuits were rare until fairly recently, when employer background check policies began to receive increased scrutiny from the Equal Employment Opportunity Commission and state legislators. The CHRIA’s broad language and substantial penalties make it a particularly popular target for plaintiffs’ lawyers — in the Taha case, for example, a jury awarded the class approximately $68 million. The Ramos court’s recent decision will only strengthen these incentives, and litigation in other states likely will continue to rise as well, given the patchwork of varying state and local restrictions regarding employer use of criminal history and credit reports. Employers should continue to monitor developments in this area and assess their background check processes accordingly.

If you have any questions about this important topic, please contact your McGuireWoods contact or the authors of this article.