Class Action Lawsuit Hits a Major Online Retailer

In yet another case of not following the guidelines set forth by the FCRA, a major online retailer has been hit with a class action lawsuit.  The suit alleges that they have violated the FCRA’s rule about not disclosing information that was found in a background check and used to deny employment.

The online retailer utilizes a staffing company for many of its hires. Within the consent form provided by the staffing company authorizing the background check, it offers that if anything appears on the background check that would potentially adversely affect the employment that the applicant would be given a copy of the background check report as well as a copy of the “Summary of Consumer Rights Under the FCRA.” Due to all of this, the class action lawsuit also states that the applicant never received the right to clear up any inaccurate information. As a result of the background check, the applicant was denied employment.

Under the FCRA, any company using a background check (consumer report) must follow the steps of pre-adverse action, which gives the applicant the chance to dispute the findings within a reasonable amount of time. This pre-adverse action includes a notification of the action and a copy of the background check report used in the hiring process.  The Summary of Consumer Rights should be provided to the applicant at the time that the applicant consents to the background check.

Unfortunately, this is yet another class action lawsuit that could have been avoided had the procedures been followed. Even if this is a case of one candidate “falling through the cracks” it doesn’t matter when it comes to potential litigation. The FCRA clearly outlines its procedures, and if they are not followed, companies are faced with the possibility of legal action. This type of class action lawsuit is commonplace, and it is a reminder to any company looking to hire that they need to have a clear understanding of these laws when conducting a background check.