In the last year, Whole Foods, Michaels, Panera, Publix Supermarkets, just to name four, have been sued for what a Fortune article recently referred to as technical violations of the FCRA; namely the consumer consent provisions required by an employer to conduct a criminal or credit background check. Those of you with Lexis subscriptions can find articles about the lawsuits against Whole Foods, Michaels, and Panera. As noted in the Fortune piece, “Denise Trani-Morris, an employment lawyer at the Sedgwick firm in [San Francisco said that e]mployers keep fumbling over that step.”
According to the article,
Retailers and restaurants seem to be favorite targets since their frequent hiring increases the potential pool of job applicants subjected to potentially illegal background checks. And the more people affected by an illegal practice, the more money’s at stake. Plus, Trani-Morris says, state and city laws pertaining to background checks complicate matters, especially for employers that outsource the job application process to third-party vendors.
Why the recent rise in FCRA litigation against employers? “Trani-Morris, who represents employers, attributes the trend to increasingly sophisticated plaintiffs lawyers who have identified the FCRA as a particularly vulnerable area that’s ‘ripe for class actions’ and where ‘penalties are significant’”.
Eric J. Ellman is Senior Vice President for Public Policy and Legal Affairs at the Consumer Data Industry Association (CDIA) in Washington, DC. He also served for eight months as Interim President and CEO of the Association. More