November 27, 2024
A major drugstore chain has settled in a class action lawsuit concerning background screening practices. In the suit, plaintiffs accused the company of failing to notify job applicants that it rejected them based on background checks. Despite settling, the company did not admit any fault.
The company ruled out many applicants due to their background by conducting background checks. According to the plaintiffs, some of these checks violated the Fair Credit Reporting Act (FCRA). The FCRA requires companies to notify job applicants when they dismiss the applicants from consideration due to their background check reports. In this case, the company sent emails that did not comply with FCRA requirements to rejected applicants.
According to the FCRA, employers must inform job applicants if they do not hire the applicant due to information contained in a background check. This notification is a pre-adverse action notice. It should include a copy of the consumer report used to make the decision and a summary of their rights under the FCRA. The job applicant must also receive a reasonable amount of time to respond to the notice.
If the company rejects the applicant, it must inform the individual that the information in the consumer report influenced the decision. The company must also provide the name and address of the company from which it purchased the report. The notice must also state that the company that provided the report did not make the hiring decision and cannot give the specific reasons for the decision. Furthermore, the employer must ensure the applicant knows they can obtain another copy of the consumer report free within 60 days.
A class action lawsuit is a large group of people suing a company instead of each person suing them individually. If the group wins the case, they get a part of the settlement. However, they must agree not to sue the company again for the same issue. In this FCRA lawsuit, the settlement will benefit people who applied for a job with the drug store chain between March 30, 2020, and May 17, 2022, but were denied employment based on a background check.
The settlement could provide up to $918.28 to qualified individuals. All members of the class action lawsuit could receive a payment of up to $100. Class members who planned to dispute their background check with the company could receive up to an additional $818.28 if they changed their mind after receiving the company’s email.
This lawsuit shows how important it is for employers to comply with the FCRA. One way companies can comply with the FCRA and other regulations concerning background checks is to partner with an experienced background check company.
Disclaimer:
Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.