Two recent developments related to litigation and background screening.  First, a major fast food restaurant chain became the subject of a class action complaint  recently, and second, a major business technology and services provider settled a class action complaint, the terms of which are sealed.  In both cases, plaintiffs alleged willful violations of the Fair Credit Reporting Act (FCRA) for:

  • Failure to provide individuals with a pre-adverse action disclosure containing a copy of their consumer report and a description of their rights under the FCRA as well as the opportunity to dispute the accuracy of the information contained in the consumer report (15 U.S.C. § 1681b(b)(3)); and
  • Failure to make the proper disclosure regarding a background check in a stand-alone document, separate from the employment application, and obtain the proper authorization (15 U.S.C. § 1681(b)(2)(A)(i)).

This is not the first suit alleging these violations and it won’t be the last.  Employers need to be aware of the requirements under the FCRA to provide job applicants with a disclosure and authorization requesting a background report in a separate document which isn’t muddied by other terms related to employment or releases of liability.  Second, job applicants must be afforded the opportunity to review the background report if an employer will use information contained therein adversely in case the information is incorrect.  This is part of the pre-adverse action process and it affords the job applicant the right to correct inaccurate or incomplete information with the background screening company that provided the information.  It also provides the employer with the opportunity to be made aware of such.   Companies who need advice in this area can contact us here at Arnall Golden Gregory LLP.

To read the complaints in their entirety, see: Anya McPherson v. Cannon Business Solutions, Inc., 1:12-cv-07761 (D.N.J., Sep. 16, 201