Numerous background check laws exist. While you may expect them at the federal and state level, background check laws are also found on the books of cities and towns. Keeping up with multiple regulations is tough but essential. Breaking a single screening law can drag you into an expensive lawsuit.
Delta Airlines paid $2.3 million to settle a background check lawsuit. In the Delta case, they didn't follow the Fair Credit Reporting Act requirements. The Fair Credit Reporting Act (FCRA) requires that employers give applicants a stand-alone background check waiver. These waivers can't include additional information.
Delta violated this law. The airline put so much information in the waiver that applicants didn't understand what it was for. While the amount of information in a waiver may seem like a small issue, the federal government takes it very seriously. Other examples of simple issues:
Costco paid nearly $2.5 million to end an FCRA class-action lawsuit alleging the company failed to use proper standalone disclosure notices to obtain background reports.
Petco Animal Supplies, Inc., agreed to pay $1.2 million to resolve the claims of approximately 37,000 individuals, based on allegations that its web-based application contained an FCRA disclosure containing a broad authorization for "any person" to provide "any and all information" to the consumer reporting agency, in addition to information relating to the laws of seven different states.
Omnicare, Inc., agreed to pay approximately $1.3 million to more than 50,000 class members based on allegations that its FCRA disclosure and authorization form contained a liability waiver.
Frito-Lay, Inc., agreed to pay about $2.4 million to resolve the claims of roughly 38,000 class members, based on allegations that the company included additional language in its FCRA disclosure form.
The trend of ruling against employers will continue. The lesson learned from these rulings and settlements is to act quickly in updating your FCRA disclosure and authorization forms. Employers should pay special attention to the ninth circuit's disapproval of the "all-encompassing" disclosure language used by some background screeners. Background check disclosure forms must be clear, and stand-alone!
Our clients will be provided a standalone, clear disclosure form at sign-up and upon request. To request our form email email@example.com or call (800) 452-0030.