By Ross Todd, From The Recorder

SAN FRANCISCO — A federal judge in San Jose ruled on Tuesday that LinkedIn Corp. doesn’t run afoul of the Fair Credit Reporting Act by providing premium members of its professional networking site with potential reference contacts for job candidates.

U.S. Magistrate Judge Paul Grewal of the Northern District of California knocked out the lawsuit which claimed that LinkedIn’s “References Searches” function violates the FCRA. In a 21-page opinion, Grewal concluded that LinkedIn can’t be considered a consumer reporting agency, as defined by the law, and that the reference reports it produces also don’t qualify as consumer reports. Grewal’s decision left open an opportunity for the plaintiffs to amend their lawsuit by May 19. LinkedIn’s paying premium members can use the searches to peruse their personal LinkedIn networks for a list of connections to people who’ve previously worked with a particular job candidate.

Lawyers with Greenwald Davidson in Boca Raton, Florida, and the Law Offices Todd Friedman in Beverly Hills sued last year on behalf of clients who claimed LinkedIn reference searches had cost them job opportunities. The proposed class action claimed that the lists generated from the searches amount to consumer reports under the FCRA, and that LinkedIn failed to abide by safeguards required by the law.

But Grewal found that reference searches aren’t consumer reports since they’re generated from LinkedIn users’ own input to the site. Because the results are generated from LinkedIn’s “transactions or experiences” with the job applicants themselves, Grewal wrote, the reference searches fall within an exclusion in the FCRA’s definition of a consumer report.

“As LinkedIn notes, the fact that a potential employer could use a telephone directory for a job candidate’s current employer to contact people who know the candidate does not make that directory a consumer report,” Grewal wrote.

The company is represented in the lawsuit by counsel at Morrison & Foerster. In an emailed statement, a LinkedIn spokesman said, “We are pleased that the court dismissed the plaintiffs’ legal claims and recognized that our members understand that when they share their employment history on LinkedIn they make it easier to be found and contacted regarding relevant job opportunities.”

Plaintiffs lawyer James Davidson at Greenwald Davidson said his team plans to file an amended complaint.

IMAGE: U.S. Magistrate Judge Paul Grewal, Northern District of California

Jason Doiy / The Recorder

For more on this story go to: http://www.therecorder.com/id=1202723637519/LinkedIn-Fends-Off-Suit-Over-Reference-Searches#ixzz3XUbrhnrt