FCRA Class Actions

Hyping The "Hyper-technical"

The slowly rising waves of Fair Credit Reporting Act (FCRA) class-action litigation are beginning to crash against employers. And if you thought that the FCRA only applied to credit bureaus and creditors, it's time to think again.

The FCRA applies to any business, large or small, that uses a consumer report for employment purposes. For instance, maybe you recently obtained a consumer report about a job applicant. Or, maybe you used one to decide whether to promote or terminate an employee. If any of those situations sound familiar to you, maybe now is the time for you to check whether you are in compliance with the FCRA - or you could find yourself on the receiving end of the next FCRA class actions in which recent settlements have exceeded $1 million.

FCRA class actions can be a compliance nightmare for employers because they tend to focus on hyper-technical noncompliance with the FCRA. Indeed, the vast majority of recent lawsuits have alleged deficiencies in an employer's pre-employment FCRA notice and disclosure forms. These deficiencies have ranged from including extraneous information to combining them with an employment application itself. Others have alleged failures to provide job applicants or current employees with certain post-adverse action disclosures.

Here is a sampling of some of the violations alleged in FCRA class actions from the past 12 months:

Hathaway v. Whole Foods Market California, Inc. alleging that Whole Foods Market's disclosure violated the FCRA because it contained a waiver; Ford v. Chuck E. Cheese's, alleging that Chuck E. Cheese's practice of including the notice and authorization as part of a multipage printed employment application violated the FCRA; Camacho v. ESA Management LLC, alleging that inclusion of disclosure in an at-will job application violated the FCRA; Cox Jr. v. Teletech@home Inc., alleging Teletech violated the FCRA's pre-adverse action notice requirements; White v. Century 21 Department Stores, alleging that Century 21 violated the FCRA by obtaining consumer reports without the requisite notice to and authorization from the applicant or employee; Cox v. Ozburn-Hessey Logistics, LLC, alleging a violation of the FCRA's standalone disclosure requirement where the employment application contained sections regarding the applicant's background and equal employment opportunity status; Poole v. Check 'N Go, alleging violation of the FCRA's standalone document requirement...