COOK v. BANK OF AMERICA, N.A.
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE R. BARCLAY SURRICK ON 11/14/2023. 11/14/2023 ENTERED AND COPIES E-MAILED.(sg)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BANK OF AMERICA, N.A.
NOVEMBER 14, 2023
This is an action under the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (the
“FCRA”), specifically, the FCRA provisions applicable to the use of a “consumer report” for
employment purposes. Presently before the Court is Defendant Bank of America, N.A.’s
(“BANA”) Motion to Dismiss Plaintiff’s Complaint. (ECF No. 5.) For the following reasons,
BANA’S Motion will be denied.
Plaintiff Steve Cook (“Cook” or “Plaintiff”) alleges that in a letter dated September 7,
2021, BANA offered him the position of Senior Vice President, Business Banking Sr.
Relationship Manager. (Compl. ¶ 8, ECF No. 1.) Cook’s anticipated start date in this position
was September 27, 2021, conditioned on a satisfactory background investigation. (Id. ¶ 9.) On
or about September 8, 2021, Cook completed a BANA application form, signed a FCRA
Disclosure and Authorization, and signed the State and Local Information and Rights Regarding
Background Checks. (Id. ¶ 10.) In the ensuing weeks, Cook participated in the background
The background is derived from Plaintiff’s Complaint, the factual allegations of which
are accepted as true and construed in the light most favorable to Plaintiff as the non-moving
party. See, e.g., Doe v. Princeton Univ., 30 F.4th 335, 340 (3d Cir. 2022); McTernan v. City of
York, 577 F.3d 521, 526 (3d Cir. 2009).
investigation, and he or his counsel exchanged several communications with BANA personnel.
(See, e.g., id. ¶¶ 11, 13-14, 18.)
Cook received a Screening Report dated September 9, 2021, from Business Information
Group (“BIG”), a “consumer reporting agency,” reflecting that he had received a passing score.
(Id. ¶ 12.) BANA did not provide this Screening Report to Cook, who obtained it on his own.
(Id.) On September 29, 2021, Cook received a call from Joshua Eckman 2 regarding his
background check and was told that he had passed. (Id. ¶ 13.) Cook also authorized the release
of his Employment Data Report from Equifax, which verified and confirmed the dates of his
previous employment. (Id. ¶ 15.) On October 13, 2021, Cook received an email from BANA
with his FBI screening results, which reflected that he had no prior arrest activity. (Id. ¶ 19.)
Plaintiff alleges that “[t]o his knowledge, no information was supplied during the background
investigation that could even remotely be construed as negative.” (Id. ¶ 16.)
Nevertheless, “[w]hile awaiting the final results of the background investigation,
[Plaintiff] learned that his start date with [BANA] had been pushed back a number of times.”
(Id. ¶ 17.) On September 29, 2021, Cook received an email from BANA representative Leah
Planck advising him that his background check had not been received yet, and his start date had
been moved to October 4, 2021. (Id. ¶ 14.) It appears undisputed that BANA, in fact, rescinded
Cook’s employment offer, although it is unclear at this juncture precisely when BANA made that
decision or when Cook or his counsel first learned or had reason to believe that the offer was
being rescinded. On October 5, 2021, Plaintiff’s counsel sent a letter to BANA “for the purpose
of determining why his employment offer was rescinded.” (Id. ¶ 21.) On October 6, 2021,
The Complaint does not allege Joshua Eckman’s role or whether he was affiliated with
BIG or BANA.
“Cook received an email from [BANA] Talent Acquisition that he was no longer considered
for the position based on his ‘background check results.’” (Id. ¶ 18 (emphasis added.)
Plaintiff alleges that “at no prior time was [he] made aware of any negative or adverse
information that would be considered a ‘red flag’ with respect to his background.” (Id. ¶ 20.)
On November 18, 2021, Plaintiff’s counsel spoke by telephone with BANA’s counsel to
discuss why Cook’s employment offer had been rescinded. (Id. ¶ 22.) On that call, BANA’s
counsel suggested for the first time that an investigation into a Paycheck Protection Program
(“PPP”) loan 3 received by Cook’s business “may” have been the reason for BANA’s withdrawal
of his employment offer. (Id.) In subsequent communications, BANA “provided varying and
inconsistent explanations” for its rescission of Plaintiff’s job offer, including suggesting that
“[Plaintiff] did not disclose a PPP loan; a background investigation revealed that [Plaintiff]
‘may’ have violated the terms of the SBA promissory note for a PPP loan; [Plaintiff’s] receipt of
a PPP loan was ‘fraudulent’; and [Plaintiff’s] use of PPP funds was inappropriate.” (Id. ¶ 23
(emphasis added).) Plaintiff alleges that “[b]ased on these varying and inconsistent explanations,
it was evident that [BANA] was operating from misinformation, lack of information, and/or
mistaken assumptions.” (Id. ¶ 24.) In communications with BANA, Plaintiff and his counsel
disputed any suggestion of impropriety in relation to a PPP loan for his business. (Id. ¶¶ 25-28.)
In a January 21, 2022, email to Plaintiff’s counsel, BANA’s counsel stated “that Mr. Cook had
both a PPP and EIDL loan or loans. Only the EIDL loans were reviewed as part of the
The PPP loan program was established pursuant to the Coronavirus Aid, Relief, and
Economic Security Act (the “CARES Act”), enacted in response to the COVID-19 pandemic.
See Springfield Hosp., Inc. v. Guzman, 28 F.4th 403, 408 (2d Cir. 2022); see also Pub L. No.
116-136, 134 Stat. 281 (2020). “The PPP authorized the Small Business Administration (the
“SBA”) to guarantee favorable and potentially forgivable loans to businesses negatively
impacted by the pandemic.” Id.; see also 15 U.S.C. § 636(a)(36) (codifying PPP program).
background check process.” 4 (Id. ¶ 28 (emphasis added).) Plaintiff alleges that “[t]his was the
first time since [he] was offered the position on September 7, 2021 that [BANA] suggested that
Mr. Cook’s receipt of EIDL loans was the reason the offer was withdrawn. At no time during
the hiring process did anyone on behalf of [BANA] ever mention EIDL loans to Mr. Cook.”
(Id. ¶ 30.)
The Complaint alleges that on February 15, 2022, BANA’s counsel sent another email to
Plaintiff’s counsel regarding EIDL loans and grants to Cook’s business. This email stated:
Jeff – Again, I apologize for the delay in more fully responding to your e-mails
regarding Mr. Cook. However, based on one of your last e-mails that suggested
Mr. Cook had never heard of, or been asked about, “EIDL” funds as part of the
Bank’s background check, we felt it prudent to verify exactly what SBA COVID
relief funds were deposited into Mr. Cook’s VetteWork LLC business account.
The account records show that Mr. Cook/VetteWork received both an Economic
Injury Disaster Loan (EIDL) and an Economic Injury Disaster Grant (EIDG). The
Bank’s records also show that the background investigation team specifically
identified EIDL/G proceeds when it spoke with Mr. Cook.
(Note: the VetteWork account also shows a separate deposit for the PPP funds
associated with the Promissory Note you previously sent. However, PPP is not
part of the background check process, so played no role here.)
It is our understanding that, under the EIDL regulations, a borrower can use COVID
EIDL proceeds for owner compensation as reasonable remuneration directly related
to performance of services for the business to the extent necessary to carry the
concern until resumption of normal operations and not to exceed what the business
could have provided in the absence of COVID. Based on VetteWork LLC account
records, it appears that the business earned more in 2020, compared to its 2019/preCOVID earnings and that Mr. Cook paid himself more in 2020 than 2019/preCOVID levels. (i.e., account records do not suggest that VetteWork, LLC
experienced a downturn in ‘normal business operations’ that would have supported
the receipt and use of EIDL and EIDG funds.)
The CARES Act also temporarily expanded eligibility for SBA’s Economic Injury
Disaster Loan (“EIDL”) program and appropriated funds for a new “Emergency EIDL Grants”
program, also known as the EIDL Advance Program. See Pub. L. No. 116-136, 134 Stat. 281
Thank you for your patience and I hope this additional information will bring the
matter to a close. If you feel this analysis is in error or factually incorrect, please
send me your position on these points, as they are the issues applicable to the
background check assessment.
(BANA Mem. Ex. 1, ECF No. 6-1 (italics in original); see also Compl. ¶ 32 (excerpt of Feb. 15,
2022, email).) Based on BANA’s Memorandum in support of its Motion and the February 15,
2022, email attached as an exhibit thereto, the account records BANA reviewed were for Cook’s
business, VetteWorks, LLC, not for his individual accounts, if any, with BANA. BANA’s
Motion and Memorandum do not state how it learned of VetteWorks, LLC’s SBA program
loans, or why and under what authority BANA reviewed the VetteWorks, LLC account records
in connection with Plaintiff’s prospective employment. Plaintiff alleges that commercial banks,
like BANA, are not parties to and have no role in the SBA EIDL program, and they do not
underwrite, approve, fund, secure, administer, or service these loans. (Compl. ¶ 31.) Therefore,
the Complaint alleges, “[BANA] relied on information from third parties, including but not
limited to the SBA and other entities, to falsely conclude that [Plaintiff’s] receipt of EIDL loans
was improper. (Id. ¶ 26.)
Based on the foregoing allegations, Plaintiff asserts a claim against BANA for violating
the FCRA, specifically, 15 U.S.C. § 1681b(b)(3), by failing to provide Plaintiff the following
before taking adverse employment action based in whole or in part on information obtained from
a consumer report: (a) the required pre-adverse action notice, (b) a copy of the consumer report,
and (c) a written description of the consumer’s rights under the FCRA. (Id. ¶¶ 44-49.) Plaintiff
further alleges that BANA acted in an arbitrary and capricious manner in its violation of the
FCRA. (Id. ¶ 50.)
“[A] plaintiff must allege ‘enough facts to state a claim to relief that is plausible on its
face’” in order to survive a motion to dismiss pursuant to Rule 12(b)(6). New Jersey Carpenters
& the Trustees Thereof v. Tishman Const. Corp. of New Jersey, 760 F.3d 297, 302 (3d Cir. 2014)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A complaint has facial
plausibility when there is enough factual content ‘that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.’” Id. (quoting Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009)). When considering the sufficiency of a complaint on a 12(b)(6)
motion, a court “must accept all factual allegations in the complaint as true and draw all
reasonable inferences in favor of the plaintiff.” Id. (citing Phillips v. Cnty. of Allegheny, 515
F.3d 224, 231 (3d Cir. 2008)). “In addition to the complaint, courts may consider matters of
public record, orders, exhibits attached to the complaint and items appearing in the record of the
case in disposing of a motion to dismiss under Rule 12(b)(6).” Oshiver v. Levin, Fishbein,
Sedran & Berman, 38 F.3d 1380, 1385 n.2 (3d Cir. 1994); see also See Schmidt v. Skolas, 770
F.3d 241, 249 (3d Cir. 2014).
A complaint that merely alleges entitlement to relief, without alleging facts that show
such an entitlement, must be dismissed. See Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d
Cir. 2009). “Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678. “While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations.” Id. at
679. A complaint must contain “‘enough facts to raise a reasonable expectation that discovery
will reveal evidence of’ the necessary element.” Phillips, 515 F.3d at 234 (quoting Twombly,
550 U.S. at 556). This pleading standard, however, does not require a complaint to prove the
plaintiff’s claims or to disprove anticipated defenses. “There are two sides to every story. But a
complaint need not tell both.” Doe v. Princeton Univ., 30 F.4th 335, 339 (3d Cir. 2022). Under
the standard of Twombly and Iqbal, a district court must “accept[ ] as true” the factual assertions
of a complaint,” and remain mindful that “[t]he proper place to resolve factual disputes is not on
a motion to dismiss, but on a motion for summary judgment.” Id. at 342 (citations omitted).
In determining whether dismissal of the complaint is appropriate, courts use a two-part
analysis. Fowler, 578 F.3d at 210. First, courts separate the factual and legal elements of the
claim and accept all of the complaint’s well-pleaded facts as true. Id. at 210-11. Next, courts
determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a
“‘plausible claim for relief.’” Id. at 211 (quoting Iqbal, 556 U.S. at 679). The analysis is a
“context-specific task that requires the reviewing court to draw on its judicial experience and
common sense.” Iqbal, 556 U.S. at 679.
FCRA Purpose and Relevant Provisions
In enacting the FCRA, “Congress found that ‘[c]onsumer reporting agencies have
assumed a vital role in assembling and evaluating . . . information on consumers.’ Therefore,
‘[t]here is a need to ensure that [they] exercise their grave responsibilities with fairness,
impartiality, and a respect for the consumer’s right to privacy.’” Long v. Se. Pennsylvania
Transp. Auth., 903 F.3d 312, 318 (3d Cir. 2018) (quoting 15 U.S.C. §§ 1681(a)(3), (a)(4).) The
provisions of the FCRA seek to ensure that “consumer credit, personnel, insurance, and other
information” is assembled, evaluated, and investigated “in a manner which is fair and equitable
to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of
such information.” 15 U.S.C. § 1681(b). “‘These consumer[-]oriented objectives support a
liberal construction of the FCRA,’ and any interpretation of this remedial statute must reflect
those objectives.” Long, 903 F.3d at 318-19 (quoting Cortez v. Trans Union, LLC, 617 F.3d
688, 706 (3d Cir. 2010).)
The following terms defined in the FCRA are relevant to resolution of BANA’s Motion.
Under the FCRA, a “consumer” is an individual, 15 U.S.C. § 1681a(c), and a “person” is “any
individual, partnership, corporation, trust, estate, cooperative, association, government or
governmental subdivision or agency, or other entity,” id. § 1681a(b). A “consumer reporting
agency” is “any person which, for monetary fees, dues, or on a cooperative nonprofit basis,
regularly engages in whole or in part in the practice of assembling or evaluating consumer credit
information or other information on consumers for the purpose of furnishing consumer reports to
third parties, and which uses any means or facility of interstate commerce for the purpose of
preparing or furnishing consumer reports.” Id. § 1681a(f).
“The term ‘consumer report’ means any written, oral, or other communication of any
information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit
standing, credit capacity, character, general reputation, personal characteristics, or mode of living
which is used or expected to be used or collected in whole or in part for the purpose of serving as
a factor in establishing the consumer’s eligibility for . . . (B) employment purposes.” Id.
§ 1681a(d)(1). The FCRA contains certain exclusions from the definition of “consumer report,”
providing that this term does not include “any-- (i) report containing information solely as to
transactions or experiences between the consumer and the person making the report; [or] (ii)
communication of that information among persons related by common ownership or affiliated by
corporate control.” Id. § 1681a(d)(2)(A)(i), (ii). “Employment purposes,” when used with
respect to a consumer report, “means a report used for the purpose of evaluating a consumer for
employment, promotion, reassignment or retention as an employee.” Id. § 1681a(h).
In the context of employment, the FCRA defines “adverse action” as a “a denial of
employment or any other decision for employment purposes that adversely affects any current or
prospective employee,” id. § 1681a(k)(1)(B)(ii); or, under the “catch-all” provision, “an action
taken or determination that is . . . made in connection with an application that was made by, or a
transaction that was initiated by, any consumer” and “adverse to the interests of the consumer,”
id. § 1681a(k)(1)(B)(iv).
Within the framework of the preceding sections, the FCRA sets forth the permissible
purposes, and conditions on certain uses, of consumer reports. See 15 U.S.C. § 1681b. In this
action, Plaintiff alleges that BANA violated § 1681b(b)(3), which provides as follows:
Conditions on use for adverse actions
(A) In general
Except as provided in subparagraph (B), in using a consumer report for employment
purposes, before taking any adverse action based in whole or in part on the report,
the person intending to take such adverse action shall provide to the consumer to
whom the report relates-(i) a copy of the report; and
(ii) a description in writing of the rights of the consumer under this subchapter, as
prescribed by the Bureau under section 1681g(c)(3) of this title.
15 U.S.C. § 1681b(b)(3) (emphasis added). 5 The purpose of this pre-adverse action notice is to
provide applicants and employees with sufficient time to discuss the reports with prospective or
current employers or to otherwise respond before the employer takes adverse action. See Long,
903 F.3d at 319 (3d Cir. 2018) (“The meaning of § 1681b(b)(3) is plain: before an employer
Additional sections of the FCRA impose further obligations relating to adverse
employment action, including requiring post-adverse action notice, see 15 U.S.C. § 1681m(a);
and imposing specified duties on a person taking certain actions based on information provided
by an affiliate, see id. § 1681m(b)(2).
takes adverse action based in any part on a consumer report, the consumer has a right to receive a
description of his rights under the FCRA, as well as a copy of his report, regardless of its
accuracy.”); Goode v. LexisNexis Risk & Info. Analytics Grp., Inc., 848 F. Supp. 2d 532, 537
(E.D. Pa. 2012) (same).
Plaintiff Alleges a Plausible Claim Under the FCRA
Before addressing BANA’s arguments for dismissal, we note that BANA does not
challenge Plaintiff’s allegations that, for purposes of the FCRA, Cook is a “consumer,” he and
BANA are “persons,” BANA obtained a “consumer report” (or reports) from a “consumer
reporting agency” (or agencies) for “employment purposes,” 6 and BANA’s revocation of
Plaintiff’s employment offer was an “adverse action.”
Rather, BANA’s Motion is premised on the contentions that Plaintiff has not and cannot
allege that BANA based its rescission of his employment offer on information it received from a
consumer reporting agency in a consumer report. (BANA Mem. at 1.) Specifically, BANA
argues that Plaintiff’s claim under FCRA § 1681b(b)(3) is foreclosed by the Complaint’s
allegations: stating that “[t]o [Plaintiff’s] knowledge, no information was supplied during the
background investigation that could even remotely be construed as negative”; reciting BANA’s
counsel’s assertions that the adverse decision was based on BANA’s review of Cook’s receipt
and use of EIDL funds purportedly gleaned from BANA’s review of its own records; and
asserting that BANA relied on information from third parties, including the SBA, in deciding to
revoke his offer. (Id. at 3-4, 6-7.) We disagree.
Specifically, it appears undisputed that BIG and Equifax are “consumer reporting
agencies” as defined by FCRA. Id. § 1681a(f).
First, Plaintiff’s allegation that, to his knowledge, no negative information was supplied
during the background investigation does not preclude his claim for violation of the FCRA preadverse action notice requirement. 7 By its terms, § 1681b(b)(3) does not limit the notice
obligation to situations involving the use of negative (or inaccurate) information in a consumer
report. See 15 U.S.C. § 1681b(b)(3)(A); see also Long, 903 F.3d at 319 (3d Cir. 2018) (holding
that the notice requirements of FCRA § 1681b are “not limited to situations where the report is
inaccurate”); Robertson v. Allied Solutions, LLC, 902 F.3d 690, 696, (7th Cir. 2018) (“[A]n
employer’s disclosure obligations under [15 U.S.C. § 1681b(b)(3)(A) ] exist to serve interests
beyond the problem of inaccurate reports.”).
Second, the fact that Plaintiff was not made aware of negative information supplied
during the background investigation does not render implausible inferences that the consumer
report(s) obtained by BANA from consumer reporting agencies, did in fact contain negative
information, or that BANA based its adverse action, in whole or in part, on negative consumer
report information. To the contrary, such inferences are plausible in view of Plaintiff’s
allegations that: (1) BANA Talent Acquisition advised him on October 6, 2021, that he was no
longer being considered for employment “based on his ‘background check results’” (see Compl.
¶ 18); (2) it was not until weeks later that BANA contended first, that its adverse action was
based on Plaintiff’s PPP loan and, later, on his EIDL loans through the SBA (Id. ¶¶ 29-30); and
(3) BANA was not a party to, and had no role in, Plaintiff’s EIDL loans and, therefore, BANA
learned of those loans from, and based its decision, at least in part, on information from a third
We note that the sources of information considered and bases for BANA’s revocation of
Plaintiff’s employment offer are uniquely within BANA’s knowledge. See, e.g., Lincoln Ben.
Life Co. v. AEI Life, LLC, 800 F.3d 99, 107 n.31 (3d Cir. 2015) (“Several Courts of Appeals
accept allegations “on information and belief” when the facts at issue are peculiarly within the
party consumer reporting agency, whether BIG, Equifax, or another agency not disclosed to
Plaintiff by BANA. (Id. ¶¶ 31, 35-36.)
Finally, the fact that Plaintiff’s allegations recount BANA’s “varying and inconsistent” –
and allegedly post hoc – explanations, does not constitute an admission that the explanations are
true, nor does it negate the reasonable contrary inferences that can be drawn when BANA’s
proffered explanations are considered in the context of Plaintiff’s other allegations, which must
be taken as true at the pleading stage. See, e.g., Doe., 30 F.4th at 342 (“The proper place to
resolve factual disputes is not on a motion to dismiss, but on a motion for summary judgment.”)
Although the Complaint does not explicitly plead which consumer reporting agency(ies)
provided consumer report(s) containing information about the PPP and EIDL loans issued to
Cook’s business, it does plead that BANA requested authorization for and obtained consumer
reports and that such reports were the source of the information upon which BANA based, in
whole or in part, its adverse action. BANA’s self-serving assertion that it relied on its own
account records is insufficient to negate the plausible inferences that arise from Plaintiff’s
allegations. See, e.g., Reardon v. ClosetMaid Corp., No. 08-01730, 2013 WL 6231606, at *15
(W.D. Pa. Dec. 2, 2013); Vellon v. Chefs’ Warehouse, Inc., No. 22-04809, 2023 WL 6394228, at
*4 (S.D.N.Y. Sept. 30, 2023).
For the foregoing reasons, BANA’s Motion to Dismiss is denied. An appropriate order
BY THE COURT:
/s/ R. Barclay Surrick
R. BARCLAY SURRICK, J.
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