On December 21, 2017, the U.S. District Court for the Eastern District of Pennsylvania in Moore v. Rite Aid Headquarters Corp., 2:13-cv-01515, dismissed a class action lawsuit alleging a violation of the pre-adverse action notice requirements in section 1681b(b)(3) of the Fair Credit Reporting Act (“FCRA”).  Moore is significant in the body of criminal background check precedent because it is a post-Spokeo ruling dismissing a pre-adverse action notice claim (as opposed to a 1681b(b)(2) Disclosure claim) on standing grounds after the parties participated in discovery and developed a factual record.

Continue Reading The Spokeo Chronicles: FCRA Criminal Background Pre-Adverse Action Claim Dismissed for Lack of Standing

Effective March 17, 2017, the District of Columbia will join a dozen other jurisdictions across the country that prohibit an employer’s use of “credit information” in employment decisions.  The new law, D.C. Act 21-673, amends the District of Columbia’s existing human rights law by adding credit information as a prohibited basis for discrimination for any employment decision (not just hiring), and applies to employers of any size.  See D.C. Code § 2-1402.11(a)(1) and (a)(1)(4)(D), as amended.

Continue Reading D.C. to Restrict Use of Credit Information in Employment Decisions

Retailer Big Lots Stores, Inc. is facing a putative class action in Philadelphia, wherein the plaintiff alleges that the company “systematically” violated the Fair Credit Reporting Act’s (“FCRA”) “standalone disclosure requirement” by making prospective employees sign a document used as a background check consent form that contained extraneous information. Among other things, the plaintiff alleges that Big Lots’ form violates the FCRA because it includes the following three categories of extraneous information: (1) an “implied liability waiver” (specifically, a statement that the applicant “fully understand[s] that all employment decisions are based on legitimate nondiscriminatory reasons”); (2) state-specific notices; and (3) information on how background information will be gathered and from which sources, statements pertaining to disputing any information, and the name and contact information of the consumer reporting agency.

Continue Reading Employers Should Review Their FCRA Disclosure Forms

Discover how the use of criminal background checks in the hiring process is creating an increasing exposure to liability. The Equal Employment Opportunity Commission (EEOC) is aggressively pursuing this issue to ensure the practice does not have a disparate impact on minority applicants. Additionally, plaintiffs’ class action attorneys are pursuing employers nationwide for failing to conform their background check process with the dictates and protections of the federal Fair Credit Reporting Act. This webinar will highlight lessons learned in the trenches, and give insights on how to properly handle the sensitive use of criminal background check information.

Continue Reading Join Us For A Complimentary CLE Webinar: Criminal Background Checks In The Hiring Process: The Escalating Risks

While much attention has been paid this year to the EEOC’s agenda and litigation over criminal background checks (the agency asserts such background checks have a disparate impact on minority groups), a parallel challenge kept pace in the form of private class action litigation under the Fair Credit Reporting Act (“FCRA”). 2013 saw a number of significant class action settlements against both employers and consumer reporting agencies (“CRAs”) for alleged violations of the Act in the use of criminal background checks:

Continue Reading Criminal Background Checks: Reviewing the Year in FCRA Class Action Settlements

As reported on Hunton & Williams’ Privacy and Information Security Law Blog, on January 25, 2013, Kmart Corporation (“Kmart”) agreed to a $3 million settlement stemming from allegations that it violated the Fair Credit Reporting Act (“FCRA”) when using background checks to make employment decisions. The FCRA addresses adverse actions taken against consumers based on information in consumer reports and includes numerous requirements relating to the use of such reports in the employment context.

Continue Reading…

The U.S. Department of Justice has moved to intervene to defend the constitutionality of the Fair Credit Reporting Act (“Act”) against a consumer reporting agency accused of violating § 605 of the Act.

On November 23, 2010, Shamara T. King filed suit against General Information Services, Inc. (“GIS”) in Pennsylvania federal court claiming violations of the Act.  (See, King v. General Information Services., No. 2:10-CV-06850 (E.D. Pa. Nov. 23, 2010).  Specifically, King claims that when she applied for a job with the United States Postal Service, GIS performed a background check that included details about a car theft arrest that occurred more than seven years prior to the requested background check.  According to § 605(a)(5) of the Act, consumer reporting agencies cannot provide adverse information, except for criminal convictions, “which antedates the report by more than seven years.”

Continue Reading Be Cautious Of How Far Back You Are Looking Into An Applicant’s Civil Or Criminal History

A commonly used pre-employment screening method–conducting credit checks–has drawn increased scrutiny in recent months. Legislatures at the state and federal levels are considering bills that would limit employer use of credit checks. Moreover, two recently-filed lawsuits, one of which was filed by the EEOC, seek to challenge the use of pre-employment credit checks in hiring decisions. 

Only four states–Hawaii, Illinois, Oregon, and Washington–currently have laws regulating employer use of credit history data. Sparked by the downturn in the economy, fourteen additional states–California, Colorado, Connecticut, Indiana, Kentucky, Maryland, Missouri, Nebraska, New Jersey, New Mexico, New York, Pennsylvania, Texas, Vermont–are considering similar measures.

Continue Reading Legislatures And The EEOC Shine Spotlight On Credit Checks