Unreported / Non-Citable
Background
Plaintiff Robert Ochoa applied for employment at Ralphs Grocery Company in July 2021. His offer was contingent on a background check conducted by HireRight, LLC. On August 18, 2021, HireRight issued a revised report stating Ochoa “Does Not Meet Company Standards,” leading Ralphs to rescind the offer.
Ochoa alleged he did not suspect the withdrawal was unlawful until November 2024, when the California Civil Rights Department (CRD) notified him of a civil action against Ralphs for violations of the California Fair Chance Act (FCA). Ochoa filed a CRD complaint on September 4, 2025, and initiated this lawsuit in state court in November 2025, asserting six claims: FCA violation, aiding and abetting discrimination under FEHA, negligence, intentional infliction of emotional distress (IIED), FCRA violation, and UCL violation. Defendants removed the case to federal court and moved to dismiss all claims as time-barred.
The Court’s Holding
The court granted in part and denied in part the motions to dismiss. The FCA claim (Count 1), aiding and abetting claim (Count 2), and UCL claim (Count 6) were dismissed with leave to amend. The IIED claim (Count 4) was dismissed without leave to amend as futile.
The negligence claim (Count 3) and FCRA claim (Count 5) survived. The court held the FCA and FEHA claims were untimely on the face of the complaint because the adverse action occurred in August 2021 and the CRD complaint was not filed until September 2025, exceeding the three-year statute of limitations and the 90-day delayed discovery extension. Equitable tolling did not apply due to insufficient allegations of timely notice and reasonable diligence.
The negligence claim survived because the complaint did not establish when Ochoa knew or should have known of the alleged duty. The FCRA claim survived because Defendants failed to meet their burden of showing a reasonably diligent plaintiff would have discovered the violation in August 2021. The UCL claim, predicated on the FCRA violation, was time-barred under the four-year statute of limitations because the conduct occurred in August 2021 and suit was filed in November 2025.
Key Takeaways
- FCA and FEHA claims require a CRD complaint within three years of the adverse action, with only a 90-day extension for delayed discovery; a four-year gap is fatal on the pleadings.
- Equitable tolling under the FCA requires timely notice to the defendant, lack of prejudice, and reasonable good-faith conduct; mere ignorance of the law is insufficient.
- A negligence claim may survive a statute of limitations challenge at the pleading stage if the complaint does not establish when the plaintiff discovered the defendant’s alleged duty.
- For FCRA claims, the defendant bears the burden of proving constructive discovery; awareness of a background check alone does not establish discovery of a specific procedural violation.
- A derivative UCL claim accrues when the underlying unlawful conduct occurs, not upon discovery, so it can be time-barred even if the predicate FCRA claim is timely.
Why It Matters
This order clarifies the interplay between administrative exhaustion, delayed discovery, and equitable tolling in California employment discrimination and fair chance hiring cases. It reinforces that the FEHA’s 90-day discovery extension is narrow and that equitable tolling demands active diligence, not just subjective ignorance. The ruling also highlights the distinct accrual rules for FCRA (discovery-based) versus UCL (conduct-based) claims, creating a potential trap where a timely FCRA claim cannot support a time-barred UCL claim.
The survival of the negligence claim underscores that duty discovery can be a fact-intensive inquiry inappropriate for resolution on a 12(b)(6) motion. The order highlights that related hiring claims can have materially different accrual rules. A discovery-based federal limitations period may preserve an FCRA claim even when a UCL theory based on the same transaction accrued when the conduct occurred.
Employers moving to dismiss must show why a reasonably diligent applicant would have discovered the specific violation, not merely that the applicant knew a background check happened. Applicants invoking equitable tolling should plead timely notice, lack of prejudice, and diligent good-faith conduct rather than relying on ignorance of legal rights. The negligence and FCRA claims survived. The FCA, aiding-and-abetting, and UCL claims were dismissed with leave to amend; IIED was dismissed without leave. Ochoa received 21 days to amend only the limitations defects, with a redlined pleading required.