Walmart is the latest corporation or organization to face a class action lawsuit regarding their disclosure notices to prospective employees regarding their intention to procure a background check. Over the last several years the plaintiff’s bar has identified specific language in the Fair Credit Reporting Act (FCRA) that has made the background check disclosure form a fertile target for litigation.
In the FCRA, there is a requirement that disclosure document “consist solely of the disclosure” with no “extraneous information”, making the disclosure “clear and conspicuous”. Information that companies or organizations have included on their disclosure forms that have initiated litigation include:
- Language that claims to release you from liability for conducting, obtaining, or using the background screening report
- A certification by prospective employee that all information in application is accurate
- Overly broad authorizations that permit release of information that the FCRA doesn’t allow to be included in report
- Mentions of other statutes concerning background check reports such as various state laws
- Wording that purports to require the prospective employee to acknowledge that your hiring decisions are based on legitimate non-discriminatory reasons
When considering federal disclosure forms, it’s important to remember that the only information that should be contained on that form is the disclosure itself. If you are in a locality that requires additional disclosures for a state law, then a separate disclosure to satisfy that state law should be offered to the candidate. Never combine, never include any extraneous information.
In Randy Pitre v. Wal-Mart Stores Inc., the plaintiffs allege that Walmart included “extraneous” information in their disclosure forms and violated the requirements in the FCRA and also the California Investigative Consumer Reporting Agencies Act (ICRAA) and the California Credit Reporting Agencies Act (CCRAA). Because of this, the lawsuit alleges workers and prospective workers were not provided proper notice that their information would be gathered.
Earlier this year a federal district court in California granted certification to a class that may have as many as five million class members. With the size of the class this lawsuit can potentially be very expensive to Walmart.
It’s recommended that anyone who conducts background screening conduct periodic reviews of their screening process and the forms they use. It’s vital that these processes and forms remain compliant with all relevant federal and state laws.
As always, IntelliCorp recommends you consult with an attorney specializing in FCRA compliance to assist you in reviewing your forms.
Visit our Forms page to access forms necessary to conduct background screening.
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