As Littler has reported, the number of class action lawsuits against employers alleging violations of the Fair Credit Reporting Act (FCRA) has continued to spike. Most lawsuits proceed in federal court, but the FCRA allows plaintiffs to file in either federal or state court. On July 13, 2017, a class action was certified in state court in Los Angeles. The suit alleges violations of the FCRA’s disclosure and notice provisions. The state court judge did not decide any issues of liability, but rather that those questions can be decided in one proceeding on behalf of the class members. The court’s opinion serves as another reminder of the importance of vigilance with regard to FCRA compliance.
The FCRA is the federal law that regulates employer use of “consumer reports,” more commonly known as “background checks” or “background reports.” Before an employer may obtain a consumer report from a consumer reporting agency, typically the employer must make a “clear and conspicuous” written disclosure to the consumer (which could be a job applicant or employee), in a document consisting “solely” of the disclosure, that a consumer report may be obtained. The consumer must provide written authorization before the employer may obtain a consumer report for employment purposes. If the employer takes adverse action against the consumer based in whole or in part on information contained in the report, the employer must provide the consumer with a pre-adverse action notice, which must include a copy of the report and any necessary disclosures (e.g., the FCRA Summary of Rights).
During the last few years, the number of federal class action lawsuits against employers alleging hyper-technical non-compliance with the FCRA has skyrocketed. FULL ARTICLE