Class actions against employers requesting background checks on applicants or employees are mushrooming. In 2015, BMW, Calvin Klein, Chuck E. Cheese, Food Lion, Home Depot and Whole Foods paid settlements ranging from $716,400 to $3 million in Fair Credit Report Act (FCRA) lawsuits.
Surprisingly, this is just one of the many employment screening trends as reported by the Society of Human Resources (SHRM).
FCRA Class-Action Lawsuits Will Increase
Class-action lawsuits claiming non-compliance with the FCRA will continue to increase in 2016, experts agree.
Most FCRA class-action lawsuits against employers are over alleged violations that could have easily been avoided by a review of forms and processes. In addition to the required disclosure and authorization form provided before screening occurs, employers are obligated to provide a notice of intent to take adverse action form, a copy of the Summary of Your Rights under the FCRA and a copy of the background check to those applicants being turned away due to information found in the screen. Once a final decision not to hire has been made, employers must also supply the applicant with a final notice of adverse action letter. Learn more about the adverse action protocols in compliance with the FCRA, including:
- FCRA notice and disclosure requirements
- State-specific pre-adverse action notifications
- Recent FCRA lawsuit cases
- Specific timing requirements with adverse action notifications
A great example that will shed light on these issues is the highly-anticipated U.S. Supreme Court ruling in Spokeo, Inc. v. Robins. The case asks whether plaintiffs are entitled to pursue statutory damages under the FCRA without showing actual harm or injury.