April 5, 2024

A major pharmacy chain has agreed to settle a class action lawsuit. This agreement addresses accusations that the company violated the Fair Credit Reporting Act (FCRA).

 According to the claims against the pharmacy chain, the company illegally rejected applicants due to their background checks. For example, one worker claimed the company fired her after failing to confirm her Social Security Number in a background check. Failing this, the company allegedly failed to provide the report to the worker, denying her the opportunity to dispute it before the company took adverse action.

These violations include failure to supply legally required notices to the applicants. This settlement will resolve the allegations while providing the settlement class with a common fund of up to $2,225,000. The company must split this amount among class members and cover various expenses.

The FCRA includes background checks as a form of consumer reports, meaning they fall under its regulations. As such, applicants must receive sufficient notice when rejected due to the results of their background checks. This requirement is vital so candidates can respond to the results, correct errors, and explain negative information. 

According to the lawsuit, the pharmacy chain sent notices via email to the denied applicants. However, these emails failed to meet the FCRA requirements. Despite agreeing to settle the class action lawsuit, the pharmacy chain denied the FCRA violation claims and did not admit to any wrongdoing.

Regardless of the pharmacy chain’s stance, the settlement will compensate candidates who received rejections due to their background checks during a specific period. Individuals who applied for employment with the pharmacy chain can expect $100 from the settlement. Class action members include the following:

  • “[hired] between March 30, 2020, and May 17, 2022, 
  • (i) was rejected from employment due to the results of a criminal background check, and 
  • (ii) received one or both of the Disposition Emails between the date on which they received a pre-adverse action notice and the date on which they received a final adverse action notice.” 

Some applicants may qualify for a greater payout of up to $818.28. This group includes those who intended to contact the pharmacy chain about their background check results but did not due to the rejection notification. According to the settlement agreement, the suit has released the employer from any liability. However, it also guaranteed compensation for impacted applicants. As this class action lawsuit has proven, employers must follow the FCRA’s provisions, especially in background checks. Small mistakes can result in cases like this and others.

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.