Another Employer Settles Multi-Million-Dollar Class-Action Lawsuit for Improper FCRA Disclosure

In October, a major supermarket chain agreed to pay $6.8 million to settle a putative class-action lawsuit alleging that it failed to properly disclose that it would perform background checks on more than 90,000 applicants. Each class member is expected to receive approximately $75.

The plaintiff pointed to the court’s opinion in another class action - – and long-standing guidance from the Federal Trade Commission stating that including the disclosure in a job application or including a release of liability in the disclosure are FCRA violations.

We have reported on similar cases previously:

As we reported, plaintiffs’ lawyers are targeting employers in class actions based on violations of the technical provisions of the Fair Credit Reporting Act. These lawsuits do not necessarily allege that the employer’s decision violated the FCRA, but that the process around the employer obtaining and using the background check did. Scores of employers now face or have already settled lawsuits alleging the employer’s failure to provide a disclosure that complies with FCRA § 604(b)(2)(A). Nearly 30 new FCRA-class-action lawsuits have been filed against employers in 2014 alone.

In two other cases, both involving a liability waiver in the disclosure form, plaintiffs extracted even higher per person settlements. In , No. 11-1823, 2012 WL 245965 (D. Md. Jan. 25, 2012) the parties settled a class of 11,000 applicants for between $200 and $250 each. In , 2013 U.S. Dist. LEXIS 169821 (W.D. Pa. Dec. 2, 2013), the settlement awarded was $400 each.

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