To amend the Fair Credit Reporting Act to exempt certain communications from the definition of consumer report, and for other purposes.

April 24, 2001

Mr. SESSIONS (for himself and Ms. JACKSON-LEE of Texas) introduced the following bill; which was referred to the Committee on Financial Services

To amend the Fair Credit Reporting Act to exempt certain communications from the definition of consumer report, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; FINDINGS.

(a) SHORT TITLE- This Act may be cited as the `Civil Rights and Employee Investigation Clarification Act'.

(b) FINDINGS- The Congress finds as follows:

(1) The Fair Credit Reporting Act, as interpreted by the Federal Trade Commission, impedes investigations of workplace misconduct.

(2) The Fair Credit Reporting Act undermines the ability of employers to use experienced outside organizations or individuals to investigate allegations of drug use or sales, violence, sexual harassment, other types of harassment, employment discrimination, job safety and health violations, as well as criminal activity, including theft, fraud, embezzlement, sabotage or arson, patient or elder abuse, child abuse, and other types of misconduct related to employment.

(3) Employers have been advised by agencies and the courts to utilize such experienced outside organizations and individuals in many cases to assure compliance with civil rights laws and other laws, as well as written workplace policies.

(4) Employees and consumers are put at risk because the Fair Credit Reporting Act frustrates or impedes employers in their efforts to maintain a safe and productive workforce.

(5) The Fair Credit Reporting Act should not chill the use of experienced outside organizations or individuals to assist employers in their investigations of workplace misconduct or misbehavior by potentially subjecting those employers to additional liabilities or damages.

SEC. 2. CERTAIN COMMUNICATIONS EXCLUDED FROM DEFINITION OF CONSUMER REPORT.

(a) AMENDMENT TO DEFINITION OF CONSUMER REPORT- Section 603(d)(2)(D) of the Fair Credit Reporting Act (15 U.S.C. 1681a(d)(2)(D)) is amended by inserting `or (q)' after `subsection (o)'.

(b) AMENDMENT RELATING TO EMPLOYMENT INVESTIGATION REPORTS- Section 603 of the Fair Credit Reporting Act (15 U.S.C. 1681a) is amended by adding at the end the following new subsection:

`(q) EXCLUSION OF CERTAIN COMMUNICATIONS-

`(1) SELF-REGULATORY ORGANIZATION DEFINED- For purposes of this subsection, the term `self-regulatory organization' includes a self-regulatory organization (as defined in section 3(a)(26) of the Securities Exchange Act of 1934), a board of trade designated by the Commodity Futures Trading Commission, and a futures association registered with such Commission.

`(2) COMMUNICATIONS DESCRIBED IN THIS SUBSECTION- A communication is described in this subsection if--

`(A) but for subsection (d)(2)(D), the communication would be a consumer report;

`(B) the communication is made to an employer in connection with an investigation of--

`(i) suspected misconduct relating to employment; or

`(ii) compliance with Federal, State, or local laws and regulations, the rules of a self-regulatory organization, or any preexisting written policies of the employer;

`(C) the communication is not made for the purpose of investigating a consumer's credit worthiness, credit standing, or credit capacity; and

`(D) the communication is not provided to any person except--

`(i) to the employer or an agent of the employer;

`(ii) to any Federal or State officer, agency, or department, or any officer, agency, or department of a unit of general local government;

`(iii) to any self-regulatory organization with regulatory authority over the activities of the employer or employee;

`(iv) as otherwise required by law; or

`(v) pursuant to section 608.

`(3) SUBSEQUENT DISCLOSURE- After taking any adverse action based in whole or in part on a communication described in paragraph (2), the employer shall disclose to the consumer a summary containing the nature and substance of the communication upon which the adverse action is based.'.

END