A man who was fired from his job as a mortgage specialist after a background check found he’d been jailed 14 years earlier can proceed with his lawsuit against the background check company, a federal judge in Minneapolis ruled this week.

It turned out the man, charged with a misdemeanor, was never jailed but put on probation. The case was dismissed a year later.

The suit is being litigated as state lawmakers consider legislation to revise court regulations on expunging records, including criminal histories. At a legislative hearing in November, dozens told lawmakers that laws designed to give reformed offenders a second chance should be overhauled.

Under the Senate version, a person could ask a court to consider expunging a misdemeanor conviction after three years; under the House version, a misdemeanor could be expunged after five years, said Debra Hilstrom, DFL-St. Paul, chair of the House Judiciary, Finance and Policy Committee.

The draft legislation would permit expunging of felonies after five to eight years, but would not permit expunging violent crimes from records.

On Wednesday, U.S. District Judge Michael Davis allowed three claims brought by Mahlon Martin, 41, of Brooklyn Park, who was fired as a result of the background check, to be considered at a jury trial.

But Davis dismissed seven claims.

The lawsuit also had named Wells Fargo, which fired Martin, as one of the defendants. But the claim against Wells Fargo was dropped, by mutual agreement between Martin and the bank.

Daniel Leland, Martin’s attorney, said he was pleased by Davis’ ruling. “He found that companies can be held accountable for the errors” in background checks, Leland said.

Lauren Kulik, a spokeswoman for First Advantage Background Services Corp. — the background check company being sued — said in an e-mail to the Star Tribune that the company “has one of the strongest accuracy records in the industry, and we are pleased that the court’s ruling recognized that commitment by dismissing many of the claims in this case.”

She continued: “Credible and accurate background checks are an important tool that allows many employers to make decisions that protect employees and customers, enhancing productivity with peace of mind. We will continue to refine our practices while setting the industry standard in accuracy and reliability.”

‘Chance to make my case’

Davis cited an affidavit by Matthew O’Connor, First Advantage’s vice president of operations, that more than 99.75 percent of the company’s reports to Wells Fargo “have never been disputed by either Wells Fargo or by the consumers identified in the reports.”

This case was different.

In 1997, Martin was arrested when a sheriff’s uniform was found in his car, according to a summary of the case by Davis.

Martin pleaded guilty to the charge of impersonating a police officer, a misdemeanor. Ramsey County District Court suspended his sentence and required him to serve a year of unsupervised probation.

He completed his probation without incident and the court dismissed the matter in 1998, although his conviction was not expunged at that time.

Wells Fargo hired Martin as a collector in August 2009. More than a year later he became a telesales specialist, taking mortgage applications and negotiating terms of loans.

But under federal law, Wells Fargo could not employ a mortgage originator — which was what Martin did — who had been convicted of a crime involving dishonesty.

First Advantage, hired by Wells Fargo to conduct background checks, discovered Martin’s arrest for impersonating an officer, noting that he was found guilty of a misdemeanor and that the record indicated he had been jailed for a year and given probation.

Shortly after Wells Fargo fired him, Martin went to court and had the case expunged. But he also filed a form disputing First Advantage’s findings. First Advantage did not change its findings, according to Davis, and Martin filed suit in October 2011.

Davis, ruling that a “reasonable jury could find that [First Advantage’s] re-investigation was not reasonable,” let Martin’s lawsuit claims stand.

He said that by failing to correct and delete inaccurate records, First Advantage might be held by a jury to have failed to comply with either the federal Federal Fair Credit Reporting Act or the Minnesota Business Screening Services Act.

On Wednesday, Martin said that as a result of being fired, he was unemployed for six months and he and his partner lost their medical benefits.

He expressed gratitude that Davis will allow the suit over the background check to continue.

“At least I will have an opportunity to present my case to a judge and jury,” he said.