What do Home Depot, Mariott Resorts, UPS, Spokeo, Postmates, Walmart and Disneyland all share in common?
You guessed it! – well, no probably not – they’ve all been sued in the last couple months for violations of the Fair Credit Reporting Act (FCRA) for their procedures and lack of compliance in conducting background checks on prospective employees.
In short, prior to running a background check (aka “consumer report”) on a prospective employee or contractor, the FCRA mandates the prospective employee must sign a “disclosure & authorization” form and be notified of their rights under the FCRA. After the report is run, they should also be notified of any flags on their report, be given a copy of their report, and be given the opportunity and instructions for disputing inaccuracies prior to making a no-hire decision based on that information.
And, if you’re conducting your background checks online through someone who ranked high in an online search, the aforementioned Spokeo has a pending lawsuit, Robins vs. Spokeo for providing inaccurate and subsequently damaging information about the plaintiff. And naturally, for the employment background check the plaintiff was not provided the proper disclosures and denied rights per the FCRA.
Some notable FCRA related settlements of the past few years include courier service Postmates ($2.5m), Whole Foods ($803k) and grocery chain, Publix ($6m). While these are BIG companies, it only takes one spurned candidate to create an expensive legal nightmare for a small business.
Have questions about your responsibilities complying with the Fair Credit Reporting Act? Please feel free to contact us or see our Legal Resources online at Blue Chip Backgrounds. Hire safe – hire smart!
What do some of the biggest employers all have in common?