Pre-Employ Blog

Staffing Agency “Allegedly” Causes FCRA Class-Action Lawsuit Against Major Online Retailer

Posted by Bob Mather on April 13, 2015

On April 7, 2015 a major national online retailer was sued in federal court in Seattle. Like a multitude of other lawsuits sweeping the nation against employers, this lawsuit targets the technicalities of the fair credit reporting act and alleges failures to comply with specific sections. These technicality lawsuits are sweeping the nation and are resulting in astronomical settlements by the employers as well as unwanted and unneeded public relations press. williams-amazon

It’s important to note that in this case as well is any case that we (Pre-employ.com) blog about these are only allegations made in a class-action lawsuit. This isn’t proof that this business or any business or the consumer reporting agency (CRA) violated any law, any rule or any regulation. Many judges and lawyers opine that class-action lawsuits only benefit or at least benefit greatly the lawyers bringing the cases and defending the cases. There have only been allegations and no factual adjudications the fact that a demand for a jury trial has been made in a class-action lawsuit or even a settlement agreement does not mean that there is any liability or than any facts of been determined or admitted to.

What’s interesting about this class-action lawsuit and what makes it relevant to many employers across the nation (in particular healthcare in my opinion) is the fact that this employee that has filed this lawsuit is not an employee of the defendant (Amazon) but was instead a temporary staffing employee that was to be placed on Amazon property. According to the complaint, the lead plaintiff applied for a job in the background check was performed by the staffing agency. The background check report that was obtained by the staffing company listed two criminal convictions. The first conviction was accurate and did belong to the plaintiff. It was a misdemeanor conviction for having an open container of alcohol. The second conviction was reported in error and was a felony conviction for cocaine possession.

The plaintiff alleges (in the complaint) that the cocaine conviction was reported in error and that this error eliminated him from consideration for work at Amazon. He continues to allege that he was contacted and told not to show up for work because of the background check report. The plaintiff stated that he contacted the staffing firm that supplied the report and told them that the background check was incorrect.  He also told them that he had not received a copy of the background check report and that it must've had inaccurate information because he did not have any such criminal record.  In fact, he said that he was recently cleared and received a permit to carry a concealed weapon.

Section 604 of the FCRA states in layman’s terms that if an employer intends to take in an adverse action as a result of a consumer report, there are certain and specific steps that an employer must take. One of the obligations under section 604 of the FCRA is that you give the applicant a copy of the report as well as a copy of a document that is titled “a copy of your summary of rights under the fair credit reporting act”. The timing of these things is critical in many companies are attempting to do their best to follow this. What many employers don’t know and haven’t been told by their existing Background Check Company or legal resource is that there is a new version of the document you must give the applicant with a copy of their background check report. The consumer protection financial Bureau (CFPB) required starting January 1, 2013 that this form be used. This form is not to be confused with the exact same named form issued by the Federal Trade Commission (FTC) that was used by every employer prior to 2013.

Feel free to contact us if you would like more information about these or other laws, rules or regulations surrounding the FCRA or the CPFB. We also have sample forms you can forward to your legal teams for review.

Taking a look at these requirements under 604 of the FCRA, from an overall view, it makes sense. The purpose of this rule is to give applicants the opportunity to review the background check report before the information is used against them in a employment, housing, insurance or, in some cases, the issuance of credit. It really makes sense and all employers should be striving to make sure that the background check process is fair, accurate and complete. The difficulty arises in the complexity of ensuring that the report is received and read by the applicant prior to you meeting your business needs and filling the position with another qualified applicant. Many employers utilize firms like pre-employ.com to fulfill this requirement.

This lawsuit is a wake-up call to employers that use staffing agencies to place employees. Many employers that we work with have rock solid employment screening practices as well as compliance practices when it comes to the FCRA or the CPFB yet they completely ignore the requirements when it comes to the staffing agencies that they utilize. Many of our employers utilize multiple staffing agencies depending on the business need, department or location. Other employer clients of ours require all staffing agencies to utilize our services and the specific packages they require for their full time regular employees.

When helping our clients review their staffing agency contracts the term “background check” is undefined and allows staffing agencies to use the least expensive background check possible while still fulfilling the legal terms in their contracts for placement. Other staffing clients of ours forgo this methodology and honestly try to get the best background check to protect themselves and their employer clients that they are staffing for. But a prudent human resource professional or legal counsel should take a look at the contracts of the staffing agencies supplying their firm and redefined the term “background check”.

Once again, with any lawsuit or allegation mentioned in any way, we do not confirm or deny the allegations presented to the court; we are simply trying to report the facts as we see them.

Access and view the lawsuit here: 

Download Lawsuit

 

Please contact us if we can help you in any way on this or any other complicated background screening situation you may have.

Check out these other posts from our blog that you may find interesting:

EEOC Files Lawsuit Against Large Food Distributor for Sex Discrimination

Major Retailer to Pay $3 Million to Settle FCRA Lawsuit 

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Topics: Human Resources, HR Compliance, FCRA, class action

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