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More U.S. Corporations Hit with FCRA Lawsuits

More U.S. corporations are being sued for background screening and credit check violations under the Fair Credit Reporting Act (FCRA), most often resulting in class action lawsuits that are costly, time consuming, and potentially damaging to their business reputation. Some of these could have been prevented if the proper communication and reporting procedures required by this federal law were followed.

The most recent class action lawsuits are being brought against Home Depot, Aaron’s Inc., Panera, AMC, Nine West, and AutoZone. One plaintiff is involved in two separate lawsuits, leading one to assume that job applicants and perhaps their attorneys are trawling for FCRA violations that could land them some cash.

Employers must be aware of the requirements under the FCRA, and ensure that their employment applications – online and hard copy – follow the rules set in place. The proper notification that a background check will be performed must be done at the right time and include the right language. Online, automated application procedures should also be reviewed to ensure FCRA compliance.

In Henderson v. The Home Depot Inc., Home Depot Inc. faces a class action lawsuit for allegedly running both credit and background checks on employees and applicants without proper notification. The claim also states that the company did not give their applicants or employees copies of their reports before taking adverse employment action against them based on the information in the reports.The plaintiff in this case claims that he applied online for a job at a Houston, TX Home Depot. According to the case, the online application included an “I Agree” button preceded by terms and disclosures, which the plaintiff clicked, providing his agreement. The applicant then disclosed information about his past history. He subsequently completed an interview and drug test. After the drug test, the plaintiff was contacted by a Home Depot representative who informed him that he was denied employment based on information from his background check. Home Depot allegedly violated FCRA by not following adverse action procedure; the company did not provide the plaintiff with a pre-adverse action letter, nor did they provide him with a copy of his consumer report or a summary of his rights under FCRA. The plaintiff claims that even after his attorneys requested a copy of his consumer report, Home Depot did not respond or provide any information. The lawsuit also seeks to address Home Depot’s alleged FCRA violations through its online application. It is argued that the terms and disclosures that applicants agree to do not state that Home Depot may compile personal information on them from consumer reporting agencies. This class action lawsuit could include thousands of applicants, potentially costing the large corporation millions of dollars. This case is being heard in the U.S. District Court for the Northern District of Georgia. We will be providing updates as the case progresses.

An FCRA class action lawsuit is being brought against Aaron’s Inc., a rent-to-own retailer based in Georgia. The plaintiff in Antoine v. Aaron’s Inc. applied for a job at Aaron’s, and the company performed a background check on him. However, the plaintiff claims the company did not provide him with a copy of his report until after denying him employment based on information found in the background check. He also alleges that his report contained incorrect information that he was not given an opportunity to dispute. Under FCRA, when an employer chooses not to hire an applicant based in whole or in part to the background screening they must follow a two- step adverse action process. The first step provides an opportunity for the consumer to dispute any inaccuracies in the report before a final decision is made. The lawsuit alleges that Aaron’s failed to follow correct adverse action procedure, in direct violation of the FCRA. This case is also being heard in theU.S. District Court for the Northern District of Georgia and is in its initial stages.

In Mack v. Panera, LLC, the plaintiff claims that she submitted an online application for employment in May 2012. The plaintiff went on to state that Panera did not provide a stand-alone background check disclosure and authorization form and did not use the term “consumer report” in the online application. Under the FCRA, an employer must provide an authorization and disclosure form in a document that consists solely of the disclosure, and the form should not contain any extraneous information.

In Mack v. American Multi-Cinema, Inc. (AMC), the same plaintiff involved in the Mack v. Panera suit alleges that she submitted an online application for employment in November 2011. She states that AMC did not provide a stand-alone authorization and disclosure form to conduct a background check and did not use the term “consumer report.” She claims that the authorization and disclosure also included language regarding at-will employment, information about hours of work, and a disclaimer. Including extraneous language not related to the authorization and disclosure in the document is a violation of the FCRA.

Mack is seeking up to $1,000 in damages for each class member in each case. The class consists of employees and potential employees who filled out job applications with the companies within the past five years. These lawsuits could potentially costs the companies millions of dollars. Both cases are being heard in the U.S. District Court for the Southern District of Florida and are in their initial stages.

In Rumph v. Nine West, the plaintiff claims that she completed an online job application for Nine West in August 2010, alleging that the application did not use the term “consumer report” and did not provide a stand-alone document for the background check authorization and disclosure form. The lawsuit claims that Nine West violated the FCRA by including their authorization and disclosure form on a page with extraneous information including shipping information, privacy policies, and other information about the store. This case is also being heard in the U.S. District Court for the Southern District of Florida.

In Aceves v. AutoZone Inc., the plaintiff alleges that the online job application on AutoZone’s website does not contain a clear and conspicuous authorization and disclosure. The complaint claims that the authorization and disclosure is concealed on a page containing a multitude of extraneous information. Allegedly, the page where it is located includes information regarding overtime, schedules, and a release of liability, among other things. The FCRA states that an authorization and disclosure for background screening must be a stand-alone document that does not contain any extraneous language. This case is being heard in the Central District of California, and is in its initial stages.

Employers must follow federal FCRA, as well as specific state laws and local ordinances when conducting background checks through a third party provider. Working with a reputable background screening company such as Hire Image can help employers avoid the costly repercussions of a lawsuit. Click Here for a few important steps to follow to ensure your FCRA compliance.

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