Publix Super Markets Inc. has agreed to pay $6.8 million to settle a class-action lawsuit over the supermarket chain’s background check procedures.  Under the Fair Credit Reporting Act (FCRA), employers must provide prior written notice before they can procure a consumer report about any employee or applicant for employment.  The FCRA requires that this notice be “in a document that consists solely of the disclosure.”

In a class-action lawsuit filed in the Middle District of Tennessee, Plaintiff Erin Knights, on behalf of a class of over 90,000 potential class members, alleged that the disclosure used by Publix contained release language in violation of the FCRA.  Specifically, the disclosure used by Publix contained a one-sentence release stating: “I release Publix Super Markets, Inc., its employees, its authorized agents and representatives from any liability in connection with any decisions made concerning my employment based on information reported.”  As a result of this alleged violation, Publix has agreed to pay $6.8 million, which equates to $48 to each of the 90,633 class members after attorney’s fees and costs are deducted.

In December 2013, a Pennsylvania federal district court held that an employer violated the FCRA by including a waiver of rights in a combined FCRA disclosure/authorization form.  It is common practice for employers to include waiver and release language in FCRA authorization forms, however these cases underscore the importance of maintaining the required FCRA disclosure as a stand-alone document when including release language.  While the statute says a FCRA disclosure may also include an authorization, it does not allow for the disclosure to include any other content.  Therefore, employers should provide the disclosure in a stand-alone document and include any desired release language in a separate authorization form.

Violations of the FCRA are subject to statutory damages between $100 and $1,000 for each willful violation of the Act.  In light of these lawsuits, employers who procure consumer reports as part of their background check procedures for employees and applicants should carefully review their FCRA disclosures to ensure compliance with the Act.