Universal Studios Orlando is the latest employer to get hit with the class action lawsuits over background checks we mentioned in this blog (FCRA Class Action Lawsuits Jump 67%)
According to the law research site law360.com Universal Studios Orlando, the theme-park and resort operator owned by NBC Universal Inc., was hit with a putative class action accusing it of not properly disclosing that it was using credit reports on current and prospective employees to make employment decisions, according to a lawsuit removed to federal court on Tuesday.
Named plaintiff Eufemio Mendez, who claims he was denied employment based on a consumer report that was illegally procured and utilized, says that although conducting credit reports to vet employees is not roundly prohibited, Universal willfully violates the Fair Credit Reporting Act in multiple ways.
“Defendant routinely obtains and uses information in consumer reports to conduct background checks on prospective and existing employees, and frequently relies on such information, in whole or in part, as a basis for adverse employment action, such as termination, reduction of hours, change in position, failure to hire, and failure to promote,” according to the suit.
Specifically, Universal violates provisions of the law by failing to provide prospective and current employees with a copy of a document solely consisting of a disclosure that it may obtain a consumer report for employment purposes and failing to provide this disclosure prior to obtaining a copy of a person’s report, the suit alleges.
Universal also fails to provide affected class members with a copy of the pertinent consumer report — giving them a reasonable opportunity to respond to and discuss the information prior to an adverse employment action — in further violation of the FCRA, according to the suit.
Mendez claims that although the company includes a liability release within its FCRA disclosure form in the job application, the release does not meet the “longstanding regulatory guidance from the Federal Trade Commission.”
Without a doubt, employee background checks are one of the most litigious situations your company is vulnerable to.
Mendez seeks to certify two classes numbering in the thousands — one for those who suffered an adverse employment action as a result of the alleged illegal practices within the past five years and one for those who were the subject of a consumer report procured by Universal within the past five years.
The putative class requests a jury trial, declarative relief that Universal violated federal law, statutory and punitive damages and legal costs.
In response to the suit, Universal categorically denied the allegations in a brief filed Tuesday, saying that neither it nor any of its agents violated the law when making employment decisions.
“To the extent that the FCRA applied to any of defendant’s actions, defendant acted in full compliance and conformity with and in reliance on the FCRA and applicable laws, regulations, orders, opinions, and interpretations,” the company said, adding that any claims of willful violations should be dismissed.
Universal also suggested that the statute of limitations had expired for certain claims and that the claims are unsuitable for class treatment.
The proposed class is represented by Luis A. Cabassa and Brandon J. Hill of Wenzel Fenton Cabassa PA.
Universal is represented by William E. Grob and Jennifer Monrose Moore of Ogletree Deakins Nash Smoak & Stewart PC.
The case is Mendez v. Universal City Development Partners, Ltd., case number 6:15-cv-01422, in the U.S. District Court for the Middle District of Florida.
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