On LinkedIn, a Reference List You Didn't Write

LinkedIn is the industry leader in helping people make work connections. Log on, and this professional-networking site displays a sampling of "people you may know" - often including colleagues at a user's own workplace - with whom to start hobnobbing.

Now, however, four people are suing LinkedIn, contending that one of the site's networking features cost them job opportunities.

The LinkedIn service in question is called "Reference Search." It is available only to premium account holders, who pay a monthly fee. An employer or recruiter can use it to generate a list of people in its own network who worked at the same company at the same time as a job candidate. It also allows premium members to use the site's messaging system to contact people who appear on those lists, without notifying a job candidate.

In Sweet v. LinkedIn, a class-action suit filed last month in Northern California, the plaintiffs contended that LinkedIn, in providing the job reference material, enabled potential employers to "anonymously dig into the employment history of any LinkedIn member, and make hiring and firing decisions based upon the information they gather," without ensuring that the information was accurate. This, they said, is a violation of the Fair Credit Reporting Act.

"You may never know you did not get the job based on one of these so-called references," said James L. Davidson, one of the lawyers for the plaintiffs.

Joseph Roualdes, a spokesman for LinkedIn, says the company takes member privacy very seriously and intends to vigorously fight the lawsuit, whose claims it sees as without merit.

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"A reference search, which is only available to premium account holders, simply lets a searcher locate people in their network who have worked at the same company during the same time period as a member they would like to learn more about," Roualdes said in an email. "A reference search does not reveal any of that member's nonpublic information."

Whatever the suit's merits, the case illustrates how social media sites have become an essential tool for many employers and recruiters, a productive fish bowl in which to trawl for, identify, observe and vet job candidates. It also suggests that many job seekers may be unaware of the techniques a company can use to parse the information they have publicly posted online - with possible consequences for their career prospects.

The legislators who enacted the Fair Credit Reporting Act of 1970 did not anticipate social media. They were concerned about protecting consumers who might be unfairly denied a mortgage, a rental apartment or a job because of incorrect credit histories. Among other things, the law requires companies called consumer reporting agencies - which compile and share consumers' information with third parties for pre-employment background screening - to make sure that their reports are as accurate as possible. Customers of those agencies must also inform a consumer if he or she is being denied a job based on information in those reports.

Today, it is standard practice for employers and job recruiters themselves to scour social media to identify job candidates. But the situation becomes more complicated when they hire outside firms to compile reports on potential employees.

Over the past few years, federal regulators have been looking into online intelligence brokers that compile dossiers on consumers that could be used to disqualify someone from being hired - a practice industry professionals refer to as "knockout" screening.

In 2012, the Federal Trade Commission filed a complaint against Spokeo, an online data broker. The agency contended that the company had marketed reports to recruiters and background screeners without providing consumers with protections afforded by the law. The company agreed to pay $800,000 to settle the accusations. Spokeo.com now says: "Utilizing Spokeo's platform for purposes of employee screening is strictly prohibited."

In an interview last week, Julie Brill, a member of the FTC, said: "We have made clear that the FCRA applies to services offered over the Internet and mobile apps." (Brill was speaking generally about the law; she declined to comment on the LinkedIn litigation.)

The suit against LinkedIn contends that the law should apply to its reference lists. According to the complaint, the lead plaintiff, Tracee Sweet of Suwanee, Georgia, applied for a job at a hotel chain via LinkedIn. She says she was denied the job because the hotel company, without telling her in advance, used the site's search service to locate references.

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"People join LinkedIn to improve their chances of getting a job, and it looks as if the LinkedIn product was being used to prescreen people to prevent them from getting jobs," said Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group.

But LinkedIn differs from the online intelligence gatherers and apps that the FTC has cited as consumer reporting agencies.

While many people are not familiar with the business-to-business companies that compile reports on job candidates for employers or recruiters, millions of people have voluntarily posted their career histories on LinkedIn with the express purpose of broadening their professional networks and improving their job prospects. To join LinkedIn, consumers must consent to the company's user agreement; it gives the company the right "use, copy, modify, distribute, publish, and process information and content" that members contribute.

"LinkedIn is not scraping the Internet and putting together a report," said Katharine H. Parker, a lawyer at Proskauer Rose who specializes in employment-law compliance and is not involved in the LinkedIn case. "This is information people have voluntarily consented to provide to others." She added: "If you don't like how LinkedIn operates, you can terminate your account."

In the site's premium-member help center, LinkedIn says its reference search "locates people in your network who can provide reliable feedback about a job candidate." It also refers to the people whose names are generated as "trusted references for job candidates."

Even so, many LinkedIn members may not understand that a recruiter or prospective employer may run reference searches on them or that the "trusted references" generated may have only a tangential connection to them.

While I was interviewing Davidson, the plaintiffs' lawyer, he logged into LinkedIn and ran a reference search on me. The search produced a list of 43 people in his network who currently work or have done work for this newspaper - including a former IT consultant, a freelance contributor and two former interns. I had met only four people on that reference list, and none of them had direct experience working with me.

Sophisticated recruiters would not waste their time contacting people who clearly had no connection of significance to a job candidate. Even so, said Anita Ramasastry, a professor at the University of Washington School of Law in Seattle, such practices seem problematic.

"A company can now decide which people associated with you can be curators of your reputation in situations that matter," she said. "These are fundamental life decisions that matter to people economically."

© 2014, The New York Times News Service