Petco Settles $1.2M FCRA Class Action Lawsuit

Petco has recently agreed to settle a class action lawsuit over alleged FCRA violations. This lawsuit is another example of the legal trouble companies can find themselves in when they do not adjust hiring forms and procedures that take into account changing legal precedence in regards to the FCRA.

One issue that is constantly coming up surrounds disclosure and authorization forms. There are specific wordings in the FCRA that litigators have latched onto. In order for employers to make it clear to an applicant that they are seeking permission to run a background check, the FCRA directs employers to offer a “clear and conspicuous” written disclosure in a document that consists “solely” of the disclosure.

This means that employers may not also include:

  • Waivers that release the employer from liability for conducting, obtaining, or using the background screening report
  • A certification by prospective employee that all information in his or her job application is accurate
  • Legal jargon
  • Overly broad authorizations that permit the release of information that the FCRA doesn’t allow to be included in a background screening report, and more

The authorization and disclosure must be a stand-alone form. Employers should not include any other extraneous information. If they do they risk litigation.

In the Petco lawsuit, (Jacklyn Feist, et al. v. Petco Animal Supplies Inc., et al.) the plaintiffs accused the company of burying the background check notification in the fine print of its online application. There was no separate document disclosing the company’s background check policy.

Employers should conduct regular audits of their hiring procedures and forms to ensure they remain compliant with all relevant regulations and laws. Consulting with a legal professional is recommended.

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