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Posted: August 03, 2020
To many, it may seem like “business as normal” has come to a halt; but that’s not the case when it comes to the enforcement of employment laws and resulting litigation. With only a little more than half of 2020 in our rearview mirrors, we have already seen a whopping 2570 Fair Credit Reporting Act (FCRA) lawsuits filed between January 1, 2020, and June 30, 2020: an 8.2% increase compared to the same period last year.
Over the past few years, household names such as Uber, Amazon, and Target (to name a few) have all been involved in lawsuits alleging that they violated federal law in regard to screening potential job candidates, resulting in a combined (and nauseating!) $21 million in settlements.
FCRA violations seen most often that can put employers at risk include:
In a recent example, two class action suits were filed against coffee giant Starbucks in early 2019, claiming that the company failed to provide pre-adverse action notices, as well as a copy of “A Summary of Your Rights Under the FCRA” prior to taking adverse action on candidates based on information found in consumer reports. Due to this, candidates claimed that they were not given adequate time to review and dispute potential inaccuracies that they feel cost them the job. As part of the recently approved settlement, Starbucks promised to comply with the FCRA going forward and will also provide compensation in the form of cash and gift cards to approximately 8,000 former unchosen job candidates who applied with the company between December 21, 2011 and September 19, 2017. That’s a whole lot of beans for failing to send one little notice!
There are many lessons to be learned from these companies’ mistakes. If things are slow for you amid the pandemic, now is the perfect time to review your background screening procedures and documents. Make sure that your disclosure is compliant according to the FCRA and best practice guidelines. Ensure you always obtain consent from the candidate via a signed authorization prior to ordering a background check. Review your adverse action process and ensure that you are sending both notices at the proper times and are complying with any applicable State laws. Get yourself in a good spot for when hiring ramps back up.
Info Cubic can help! As your background screening partner, Info Cubic wants to help ensure that you lower your risk and maintain compliance. Contact us today for a free assessment of your current Adverse Action notices and procedures. Our FCRA-certified compliance team will help you determine whether you need to make any changes to avoid facing the same fate as our friend from Seattle.
Information and assessment provided by Info Cubic are for educational purposes only. Info Cubic does not provide legal advice and recommends that you review all procedures and documents with Legal Counsel prior to implementation in order to guarantee compliance with all applicable state and federal laws and regulations.
 According to WebRecon Stats for June 2020: An Interesting Dichotomy https://webrecon.com/webrecon-stats-for-june-2020-an-interesting-dichotomy/
Eden HutchinsonQuality Assurance & Compliance ManagerInfo Cubic