Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 5

Rodney and Ydonna Smith divorced in 1998 after having one child. In 1999, Ydonna went to work for Sears in its retail-debt collections department, where she collected debts from existing Sears account holders who were behind on their payments. In that capacity, and for that purpose, Ydonna had access to a computer and password that allowed her to use a Sears information system to obtain certain information on customers from their credit reports. At the same time, Ydonna was also trying to obtain child support payments from Rodney, but neither she nor the State of Mississippi could locate him. Ydonna used the Sears credit information system fourteen times to access Rodney's credit report in an effort to find his current address, in violation of the Fair Credit Reporting Act (FCRA). When Rodney discovered these inquiries, he complained to Sears, which fired Ydonna for violating its policy by accessing Rodney's credit report. Rodney subsequently sued Sears to recover damages for alleged violation of the FCRA, based on Ydonna's inquiries. Is Sears vicariously liable for Ydonna's violations of the FCRA? [ Smith v. Sears, Roebuck Co., 276 F. Supp. 2d 603 (S.D. Miss. 2003).]