Blog

 
     

Pizza Chain and Major Bank Sued in Class Actions for Technical FCRA Violations

By Michael Klazema on 12/20/2011

Plaintiff's law firms are suing large employers for technical violations of the disclosure requirements of the FCRA. At the beginning of the summer, we noted a class action where a plaintiff class asserted that the inclusion of the FCRA disclosure in the job application entitled the class to statutory damages of $670,000 to $6,700,000. Shortly after that, we noted a case where a company had settled a claim that the FCRA disclosure was invalid because it was not separate for $1,200,000.

We now see that a plaintiff's firm has filed class action cases against a major pizza chain and a major bank. In the pizza chain case, the plaintiff alleges that the disclosure is invalid because the disclosure form included a release of liability. In the bank case, the plaintiff alleges that the bank included its FCRA disclosure in a document covering all of the terms and conditions of employment and which contained a release of liability, instead of having the disclosure in a separate document, as the FCRA requires.

This type of claim appears to be the plaintiffs firms' favorite type of claim right now, because it is simple to prove and opens up the possibility of statutory damages ($100 to $1,000 per defective disclosure), uncapped punitive damages, and attorney's fees.

Employers should immediately review their disclosure and authorization documents and, if unsure about their compliance, put the disclosure in a separate document. Employers should ensure that their FCRA disclosures do not include a release of liability. Even if employers are certain that their forms comply with the FCRA, putting the disclosure in a separate document makes the employer a more difficult target for a class action. The evolving best practice is therefore to separate the disclosure from everything else.

 


Tag Cloud
Categories
Recent Posts

Latest News

  • June 20 Repeat background checks are becoming more common, with companies in India leading the charge. What does this trend look like, and how can employers embrace it now to stay ahead of the curve?
  • June 19

    Every federal job involves a background check of some kind. These background checks and how they are evaluated vary based on job, department, and security clearance level.


  • June 18

  • June 14 Ban the box laws aim to improve opportunities for employment. Could they have the opposite effect instead?
  • June 13 Jacobs Petroleum Products is a regional petroleum company that operates throughout Pennsylvania, West Virginia, Ohio, and Maryland. Apart from their employees carrying much responsibility and have frequent contact with customers, the company’s hiring also tends to be segmented since individual store managers are responsible for hiring talent for their own stores. In this employment landscape, Jacobs Petroleum Products needed a reliable and effective way to screen its new hires for criminal infractions and other red flags.
  • June 12

    The University of Wisconsin System may tweak its hiring and reference check processes. The potential changes come after one of UW’s assistant deans was accused of sexual harassment.


  • June 07 Stories of abuse by coaches in youth sports leagues continue to crop up around the country, but rules and guidelines remain patchy and enforcement is often lacking. The struggle to implement an effective system continues nationwide.
  • June 07 Financial background checks, usually referred to as credit history checks, can be an effective way to find out if a candidate is fit to handle accounts, financial data, and other assets at your business.
  • June 06 The Society for Human Resource Management and the Charles Koch Institute recently commissioned a survey to find out how willing employers were to hire people with criminal records. The study indicates that managers, HR professionals, and employees themselves are becoming more comfortable with the idea of hiring and working with ex-offenders.
  • June 04 Are fingerprint background checks the gold standard for employee screening, or are they overhyped? We look at some of the myths and misconceptions surrounding these checks.