A rash of claims are continuing to pile up against employers who have violated the regulations outlined in the federal Fair Credit Reporting Act (FCRA). FCRA laws must be followed to the letter when using background screening reports for employment purposes (and especially when obtained through third-party agencies).
As such, one of the most common (and easily fixed) issues causing these lawsuits are violations of the FCRA’s Clear and Conspicuous Disclosure provision. Not only do applicants provide their signed consent before a background screen is conducted.
Clear and Conspicuous Disclosure Lawsuits
The two recent class-action lawsuits against Wal-Mart and Kelly Services serve as an example of what to avoid when carrying out background check procedures. These companies have been accused of different infractions within the FCRA’s disclosure parameters: Kelly Services added illegal disclaimer and waiver language to their forms, while Wal-Mart is accused of blending their consent form language into other parts of the hiring process. Wal-Mart also violated California state law by neglecting to notify applicants about their right to a copy of their FCRA rights.
Important side note: companies operating out of CA need to be aware that this state has additional laws in place that result in a much more strict interpretation of the FCRA. Also, because of CA’s strict laws, employers can use these parameters to take a proactive approach to hiring by incorporating CA’s guidelines into their process.
Another plaintiff named Cory Groshek brought public attention to this pervasive issue by suing some forty different companies for their Clear and Conspicuous Disclosure violations. Starting in 2014, Groshek applied for 562 positions over an eighteen month period, and began initiating class action lawsuits wherever he and his lawyer found grounds for action. As of summer 2016, Groshek had amassed over 200K for his efforts.
If your current forms aren’t FCRA-compliant, the background check experts at NationSearch are here to help, and we’d love the opportunity to provide examples of what to use during the hiring process.