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Company Faces Class Action Lawsuit Over Background Checks


A former employee filed a class action lawsuit against their former employer claiming they obtained employment-related background checks without the required disclosures and written authorizations, violating the Fair Credit Reporting Act (FCRA).

Under the FCRA, a background check report may not be procured unless a “clear and conspicuous disclosure has been made in writing to the consumer” in a document that “consists solely of the disclosure” and the “consumer has authorized in writing” the procurement of the report.

The lawsuit alleges that the company violated the FCRA by:
  • Including “superfluous information” with the disclosure;
  • “[B]urying” the disclosure in small font within “a lengthy employment package;”
  • Failing to obtain written authorization before procuring a consumer report;
  • Including a liability waiver in the same document;
  • Including an authorization for third parties to release information to the company about the consumer (different from the authorization to obtain their consumer report); and
  • Failing to provide consumers with a summary of their rights under the FCRA.

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This lawsuit is another reminder of the importance of complying with the FCRA’s requirements and the ramifications if companies don’t.

For more information on FCRA requirements or if you need help reviewing your own policies, please contact us.

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