A California judge has recently ruled that Paramount Pictures Corporation has not run afoul of the federal law when it ran a credit report check on employment applicants, and has dismissed the class action lawsuit.
The lawsuit (Peikoff v. Paramount Pictures Corporation) alleged that, in 2011, Paramount had procured a consumer report on an applicant based on an ‘illegal’ disclosure and authorization form. The FCRA requires that a disclosure must be provided to an applicant stating that the consumer report may be obtained for employment purposes, and that the consumer must then authorize this in writing. The plaintiff accused Paramount of a potential FCRA violation because Paramount included this statement in its disclosure: “I certify that the information contained on this Authorization form is true and correct and that my application may be terminated based on any false, omitted, or fraudulent information. This one-sentence certification language that Paramount included in its disclosure form was found to have served to “focus the consumer’s attention on the disclosure.” The judge dismissed the case despite noting that Paramount’s form “did not comply with a strict reading of (the) requirement that the document consist solely of the disclosure and the authorization.” By using this language, the judge ruled that it did not act in “reckless disregard of the requirements of the FCRA.”
As we’ve stated before, a number of district courts have not always agreed on interpretation of the laws, so the outcome of an FCRA lawsuit is never guaranteed. However, why would an employer open itself up to the hassle and expense of a lawsuit by risking an FCRA violation? Although Paramount won, mounting a defense is costly and the outcome is not predictable, as evidenced by the 2014 Publix supermarket chain FCRA violation that paid out nearly $7 million in a settlement over a similar case to Paramount’s. Any company, no matter what the size or revenues, can prevent legal problems by making it a practice to strictly adhere to FCRA requirements in their hiring process.
Since rolling onto the scene five years ago with its easy-to-use, personal transportation app, San Francisco-based Uber shook up the traditional taxi cab industry. The company’s service (employing a roster of drivers using their own vehicles who respond to texted ride requests) quickly caught on and the company began to grow. Earlier this year, however, the negative publicity began to outweigh the positive following a report of an alleged kidnapping/sexual assault and an assault involving two separate Uber drivers in California during the same week. There have been other reported incidents as well, including an Uber driver in Chicago accused of sexually assaulting a female passenger and a tragic motor vehicle accident in San Francisco in which a 6-year-old girl was struck and killed by an Uber driver, alleged to be at fault, who had a decade-old reckless driving conviction on his record.
Could a thorough background check program have prevented these crimes and the negative publicity impacting Uber’s reputation? Former New York City Mayor Rudolph Giuliani’s security screening firm, Giuliani Partners, recently conducted an independent strategic review of Uber’s background check process. In the time since the incidents occurred, the company has taken some key steps to meet its rapidly growing needs and ensure the all-important safety of its end users. Chief among these was switching to a third-party, centralized background check team which reportedly works closely with Uber’s regional team.
In a post to the Uber website (https://blog.uber.com/giuliani) about his firm’s report, Mr. Giuliani states that Uber’s screening process is much more thorough than that of many companies conducting background checks in the taxicab industry. The company, which is slated to complete an astounding 2+ million background checks of potential drivers in 2014, has a background check process which includes a review of driving records for the currently licensed state, a social trace to identify current and prior addresses, a multi-state criminal record review, a county criminal check for all counties in which the driver resided for the past seven years, and a review of Federal criminal cases for all District courts where the driver resided for the past seven years.
Congratulations to Uber for instituting a new thorough driver screening process and for considering the safety of its passengers as paramount.