Industry News, FCRA, regulatory compliance, Delta

Delta Air Lines Faces Multi-million Settlement in Hiring Practices Lawsuit

For businesses at every level and of every size, regulatory compliance is a concern. Every industry has rules to follow intended to protect the public and foster a safe workspace. Some regulations are common to all sectors, such as the laws intended to promote fair hiring. In pursuit of protecting equal opportunities for job seekers, these guidelines outline proper practices and disclosures companies must follow.

Running afoul of these laws can have expensive consequences. Major carrier Delta Air Lines must pay a $2.3 million settlement negotiated with a class of plaintiffs who alleged that the company failed to meet its obligations under the Fair Credit Reporting Act (FCRA). The violation in question concerns the FCRA's mandate that employees receive a "standalone" declaration that a background check will be conducted and for what the results may be used. Delta made the disclosure—but not in the appropriate manner.

At issue is the need for the disclosure to be "clear and conspicuous," according to the FCRA, with no additional information which is not pertinent to a background check. Delta's mistake, which the plaintiffs agreed was not necessarily deliberate, was to include a confusing disclosure incorporated into a much longer form. The disclosure failed to meet the FCRA's criteria on several levels, but it was also difficult to read; the plaintiffs contended that understanding the disclosure required consulting the FCRA statute directly.

The FCRA's rules have a simple purpose: to allow applicants to understand their rights and responsibilities when applying to an employer that may request a background check. As it became clear that Delta's approach would be found lacking at trial, the company chose to settle with the 44,000-member class. The airline joins the growing ranks of businesses that have faced multi-million dollar fines and settlements for FCRA disclosure failures. In May of 2018, snack giant Frito-Lay paid out $2.4 million in a very similar case concerning inappropriate forms.

Other businesses, such as Target, have faced more massive lawsuits over allegedly discriminatory practices relating to background checks. 

Each of these cases highlights the critical level of importance businesses must place on regulatory compliance. Background checks, such as those incorporated into the wide-ranging US OneSEARCH provided by backgroundchecks.com, are a useful tool that can provide valuable insight during hiring. To be effective, the employer using them must know how to do so within the bounds of the law.

To make compliance a more straightforward process for businesses, backgroundchecks.com has developed both resources for understanding the FCRA and sample forms to demonstrate proper disclosure. These efforts, combined with options for robust criminal background reports, simplify the process of implementing hiring procedures that are both fair and thorough. As regulations can also vary from state to state, employers must review procedures at regular intervals to ensure ongoing compliance. 

Michael Klazema

About Michael Klazema The author

Michael Klazema is Chief Marketing Technologist at EY-VODW.com and has over two decades of experience in digital consulting, online product management, and technology innovation. He is the lead author and editor for Dallas-based backgroundchecks.com with a focus on human resource and employment screening developments.

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