Let’s be honest. There has been a lot of action taken by the Equal Employment Opportunity Commission (EEOC) against employers over the last couple of years regarding the hiring process of companies.
While these stories make HR personnel or hiring managers leery about making a mistake, there are steps to take to make sure that your company is doing everything right. Attorneys are filing cases all the time, but they are only going after those companies that are violating the FCRA or state law in their hiring process.
The best thing your company can do is to review your hiring process with legal counsel and ensure every aspect of it has been updated to comply with all of the new laws. PeopleG2 will always make sure our clients have the most up to date release forms; however, it is always good to double check just before the end of the year about any upcoming changes that might occur in the New Year. Also, as a part of your legal review, ensure that all adverse action procedures are up to date and set according to the new employment laws. Simply put…review your hiring process as often as possible.
Last year, there were a number of significant class action settlements against both employers and consumer reporting agencies (CRA’s) for alleged violations of the FCRA and the use of criminal background checks.
- Pitt v. K-Mart Corp., Case No. 11-cv-00697 (E.D. Va.): plaintiff’s October 2011 class action complaint alleged that K-Mart willfully violated the FCRA prior to obtaining consumer reports and prior to taking adverse actions against the class. In January 2013, parties reached a $3 million settlement, which received final approval from the court on May 24, 2013.
- Singleton v. Domino’s Pizza LLC, 8:11-cv-01823-DKC, — F. Supp. 2d — (D. Md. Oct. 2, 2013): in this class action complaint, filed in July 2011, plaintiffs alleged that the consent form Domino’s used for procuring a consumer report violated the FCRA and that Domino’s took adverse actions against applicants without providing the required notices prior to the adverse action being taken. The matter settled in March 2013, and was subsequently approved in October 2013. Under the terms of the settlement, Domino’s agreed to pay to $2.5 million to a settlement fund, from which plaintiffs’ counsel’s 25% fee award would be taken.
- Bell v. U.S. Xpress, Inc., 1:11-cv-00181-CLC-WBC (E.D. Tenn.): plaintiff alleged that, after applying with U.S. Xpress, defendant did not ask him if the company could obtain a consumer report as part of the application process, that defendant’s decision not to hire plaintiff was based, in part, on erroneous information in the report, and that plaintiff did not receive notice until after the decision was made, all in violation of the FCRA. In April 2013, defendant settled the class action lawsuit for $2.75 million.
- Johnson v. Midwest Logistics Systems, Ltd., Case No. 2:11-cv-01061-ALM-TPK (S.D. Ohio): plaintiff in this purported class action alleged that he was hired by defendant, pending a successful criminal background check, but that he did not receive a stand-alone consent form, as required under the FCRA, that his consumer report was inaccurate, and he was denied the position without the proper notices. The case settled in May 2013, and Midwest agreed to pay $452,380.00.
- Roe v. Intellicorp Records, Inc., Civ. No. 1:12CV2288-JG (N.D. Ohio): in this consolidated class action, plaintiffs accused two CRAs of providing inaccurate criminal background reports to employers that caused the class of applicants to suffer adverse actions, and of not notifying them at the time defendants provided the consumer reports to prospective employers. The case settled on November 12, 2013, when defendants agreed to pay $18.6 million to settle the FCRA claims.
The cases listed above are some of more notable recent lawsuits. The trend of litigation by attorneys is nothing new and it is only going to continue. At the same time, companies need to continue to hire. Background checks are a part of this hiring process and should be a part of any hiring decision. As long as a company is up to date with their policies and procedures, reviews these policies with an attorney regularly, and ensures they have all of the most updated forms and documents necessary for conducting a background check, then they can rest assured that they have done everything possible to create a clear and concise hiring process that complies with all FCRA and EEOC rules and regulations.