Why Johnson & Johnson Lost a Court Battle Over Pre-Adverse Action Mistakes

3 min

Why Johnson & Johnson Lost a Court Battle Over Pre-Adverse Action Mistakes

The U.S. District Court for the Middle District of Florida refused to dismiss a case alleging that pharmaceutical giant Johnson & Johnson pulled a job offer from an applicant over inaccurate background screening results.

On June 28, 2011, Thomas Miller was offered a job as a business specialist for J&J in the Orlando area, with the condition that he had to pass a background check first. Miller signed an authorization form that allowed background screening firm Yale Associates to conduct the check.  Criminal records in that report caused Miller’s job application to be flagged for review. According to the complaint, J&J called Miller and formally rescinded the job offer on July 12th.

On July 21st, Miller received a pre-adverse package from the screening company. Not only did he receive the copy of the report AFTER he lost the job, but he discovered that the incriminating information on the report was wrong. Miller called J&J to report the mistakes, but Yale mailed an adverse action letter on July 25th indicating the job offer was withdrawn. Yale investigated, corrected Miller’s background report and sent it to J&J, but by that time the job had been given to someone else.  Miller sued J&J alleging the company violated the Fair Credit Reporting Act (FCRA) by failing to follow required adverse action procedures.

The judge found that Yale did everything required under the FCRA, so the court granted summary judgement for the reporting agency.  On the other hand, the court determined the plaintiff showed ample evidence that he suffered damages since his current jobs paid less than he would have earned at J&J.

There are several important lessons here. Most notably, it is the employer’s responsibility to make sure all adverse action steps are taken before any decision is made. J&J argued in court that they only made an “internal” decision to revoke the offer. They used this justification to move for Summary Judgment, but phone records and internal emails show a decision was made to pull the job offer before Miller received any adverse action. The judge ruled that an internal decision is still a decision. According to the law, you cannot make any kind of decision –internal or otherwise- before the adverse action plays out.

Before any decision is made an applicant must get:

  1. A Pre-Adverse Action Notice
  2. A copy of the report and a summary of their rights
  3. Adequate time to address and fix any incorrect information

Not only do you need to have a clear adverse action policy in place, but this case also shows us how important it is to make sure it is clearly understood by every member of your hiring team.

Employer Guide to Adverse Action


Employment Background Investigations is a technology driven leader in domestic and global pre-employment background checks, drug testing, occupational health screening and I-9 compliance. We specialize in development, implementation and management of customized employment screening programs for large and multi-national clients. We are dedicated to information security.  

EBI is the only NAPBS Accredited background screening company in the world to hold both an ISO 27001:2005 certification for information security and an ISO 9001:2008 certification for Quality Management. All content provided by EBI is published for the convenience of its readers and should never be deemed as legal guidance or advice.  Always consult your legal counsel for specific advice on state laws and industry regulations.

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