- Case
- Merck v. Walmart, Inc.
- Court
- U.S. Court of Appeals for the Sixth Circuit
- Citation
- 114 F.4th 762 (6th Cir. 2024)
- Decided
- August 20, 2024
- Bottom line
- A background check notice claim is strongest when you can show that a complete, timely report would have let you correct or explain something that cost you the job.
Background
The FCRA’s employment provisions give job applicants a chance to see and respond to a background report before it costs them a job. Under 15 U.S.C. § 1681b(b)(3)(A), an employer that intends to take adverse action based in whole or in part on a consumer report must first give the applicant a copy of the report and a summary of rights.
Thomas Merck applied for an entry-level job at a Walmart in Ohio in 2016 and received a conditional offer. He answered “no” to a question about prior convictions, having forgotten a misdemeanor from about fifteen years earlier. Walmart’s background vendor found the conviction and, under Walmart’s policy, scored him “Not Competitive” for failing to disclose it. Merck’s copy of the report showed the conviction and the “Not Competitive” result. Walmart’s version also included a code, “R3,” that told Walmart the applicant had not disclosed a record. Walmart revoked the offer. Merck said he did not learn until years later, in discovery in other litigation, that the real reason was non-disclosure rather than the conviction itself.
Merck brought a class action alleging that Walmart willfully failed to provide a complete copy of the report. After TransUnion LLC v. Ramirez, the district court granted summary judgment for Walmart for lack of standing.
What the court held
Judge McKeague, writing for the panel, affirmed. The court assumed for standing purposes that Walmart violated the Act by not giving Merck the identical report it received.
On Merck’s informational-injury theory, the court read TransUnion to require two things: denial of information the plaintiff was entitled to, and adverse effects from that denial. Merck had not shown adverse effects. Walmart testified that under its policy at the time, an applicant flagged for non-disclosure could only reapply, and Merck pointed to no evidence that Walmart would have departed from that policy if he had seen the code and explained his mistake. The report was also accurate. Merck’s later applications did not change the analysis.
The court also rejected Merck’s analogies to common-law fraud and contractual non-disclosure, reasoning that those claims depend on a transaction in which one party seeks to gain from another through misleading information, and to constitutional procedural due process in public employment. Having found no concrete injury, the court did not reach causation, redressability, or Walmart’s merits defenses.
Our take
We think the court asked the wrong counterfactual. The pre-adverse action notice exists so that an applicant can learn what the employer is actually relying on and respond before the decision becomes final. Merck received a report that did not reveal the actual basis for the decision. Requiring him to prove that Walmart would have changed its mind, when Walmart’s own policy foreclosed reconsideration, comes close to saying that an employer with a rigid policy can never be sued for violating the notice requirement.
That said, Merck is consistent with the direction of post-TransUnion standing law, and other circuits have reached similar results in procedural FCRA cases. Its practical lesson is about evidence. The opinion repeatedly notes what Merck could not show: that the report was inaccurate, or that anything he could have said would have mattered. Cases with those facts look very different. Where a background report contains an error — someone else’s record, a dismissed charge reported as a conviction, an outdated item — and the applicant lost the chance to correct it before the decision, the adverse effect is concrete.
Employers will cite Merck to resist class certification on notice claims, arguing that whether each applicant could have changed the outcome is an individual question. Plaintiffs will need to build records on how employers actually use reports and whether they consider applicant responses.
What it means if your report is wrong
If an employer tells you a background check may cost you a job, read the report immediately, compare it with the employer’s explanation, and ask what specific item is the problem. If the report is wrong, dispute it with the screening company and tell the employer in writing before the decision becomes final. Keep the notices, the report, and any messages. Those documents can establish the concrete harm Merck requires. A free case review can assess how the ruling affects a claim, with no fee unless we win.
Sources
Primary
Commentary we reviewed
- Public Citizen Consumer Law & Policy Blog — Sixth Circuit rejects informational injury standing theory under FCRA
- Ballard Spahr, Consumer Finance Monitor — Appeals court: no FCRA informational injury standing
Updated November 1, 2026. "Our take" is the firm's opinion. This page is general information, not legal advice, and later decisions may change the law.