Articles Posted in FCRA

Lev Craig and Shelby Krzastek

Earlier this week, on March 6, 2017, class members and McDonald’s management requested final approval of a $950,000 proposed settlement in James Wesley Carter v. Shalhoub Management Co., et al., a class action filed in the U.S. District Court for the Central District of California. The approximately 2,300 class members allege that Shalhoub Management Co. (“Shalhoub”), a California-based McDonald’s franchise operator, did not comply with its obligations under the Fair Credit Reporting Act (“FCRA”) when it conducted background checks on employees and job applicants without their knowledge and used those background checks to determine whether to hire or terminate those individuals.

The FCRA is a comprehensive statute that regulates how consumer reporting agencies store, disseminate, and use consumer information. Under the FCRA, employers requesting background information, such as credit reports or criminal background checks, from job applicants must get the applicant’s written permission and inform applicants in writing—in a separate notice not included in the employment application—that the results of the background check may be used to make employment decisions. If an employer then takes an adverse action against an employee or refuses to hire a job applicant based on the received background information, the employer must provide the employee or applicant with a copy of the relevant report, inform the individual that they were rejected or terminated based on the report, and provide an opportunity to dispute or explain any inaccurate or negative information.

Edgar M. Rivera, Esq.

A job applicant is suing Sears for violating the Fair Credit Reporting Act (FCRA), alleging that Sears failed to provide him with a “stand alone” disclosure before obtaining his consumer report and rejected his application without giving him a copy of his consumer report.

The FCRA requires that a user of a consumer report for employment screening purposes provide applicants with copies of their consumer reports, a written summary of their rights, and a reasonable notice period before taking any “adverse employment action.” Sears allegedly rejected job applicants based on information in their consumer report without providing the report to the applicants. The FCRA also requires that an FCRA disclosure form be “clear and conspicuous,” meaning that the disclosure must not be combined with, or attached to, any other document.  Brian D. Hall, an attorney with Porter Wright and Certified Information Privacy Professional, wrote, “[Although the FCRA] does not prevent an employer from combining the disclosure and the authorizations requirements into one form, it does prohibit the disclosure and authorization from being combined with other things, like an employment application.”  Sears’ disclosure allegeldy contained extraneous information, including state law disclosures. The FCRA provides plaintiffs with statutory damages of no less than $100 and no more than $1000 per willful violation, in addition to punitive damages, costs and attorneys’ fees.

Yarelyn Mena

Today, job applications are often completed on the Internet and, sometimes, on social media sites, such as LinkedIn.  LinkedIn allows users to apply to multiple jobs with a LinkedIn account, making an applicant’s information readily available to employers. The public access to potential employee information may facilitate an applicant’s job search; however, such access can also be detrimental. For example, Tracee Sweet lost an employment opportunity based on information procured by a prospective employer through LinkedIn.

Ms. Sweet applied to work for a company in the hospitality industry, through LinkedIn. After a seemingly successful interview, the General Manager notified Ms. Sweet that the company would offer her a position. Shortly there after, the company rescinded its job offer. Confused as to why she was rejected after the company’s initial excitement with her, she reached out to the General Manager, who informed her that the company checked, and was not pleased with, her references. The company used LinkedIn’s “Reference Search” function, which allows users who pay a subscription fee to find people and companies, for which applicants previously may have worked.