Illegal Background Checks Lead to Class Action Lawsuit

A large east coast grocery store chain was alleged to have conducted illegal background checks on its prospective employees. These alleged violations of the Fair Credit Reporting Act brought about a settlement of $3 million dollars through a class action lawsuit. The law suit was filed by a group of job applicants of the chain.

One of the requirements that the FCRA has developed is the need for a “stand-alone disclosure,” one that is not attached to any sort of application. The class action lawsuit that was filed stated that the store chain violated the FCRA by not making this document a clear and conspicuous one.

While this seems like such a minor issue, it is something that is mandated by the FCRA and all employers must be in compliance. The employee who brought forth the lawsuit was terminated by the store due to a falsely reported conviction. Under the FCRA, they were also required to provide her with a pre-adverse action notice, a copy of the report and a summary of her rights under the FCRA. 

While again, these things seem minor, this is specifically the type of thing that brings about litigation against companies as lawyers are watching for illegal background checks. The FCRA has specific guidelines that protect job applicants and employees when it comes to the use of background checks. Failure to comply with these can land a company right in the middle of the same type of issue as the company mentioned in this lawsuit.

It’s important for all HR personnel to know these laws, and to share this knowledge to ensure it is included in all policies and procedures of the company’s hiring guidelines. HR is the first line of defense when it comes to illegal background checks and hiring practices. In order to stay out of the cross hairs of over-zealous lawyers looking for any small crack, a company must include all applicable federal, state and local laws into their hiring process to avoid any sort of litigation.