Recent High Dollar Settlements Illustrate Critical Need for Employers to Remain Compliant with FCRA by Working with 3rd Party Screening Companies

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A recent $6.8mm settlement by Publix Super Markets illustrates the grave importance in remaining compliant with the laws and regulations governing pre-employment background screening as put forth by the Fair Credit Reporting Act (FCRA). Adam Almeida, President and CEO of CriminalBackgroundRecords.com states: “The FCRA is very precise legislation and failure to comply exactly with the requirements stated within the law may result in a significant payout.

Criminal Background Records

Criminal Background Records

The Publix Super Market case, by itself, highlights the critical and urgent need for companies’ large and small work with qualified third party background screening companies.

The Florida based Publix Super Markets Inc. recently settled a class action lawsuit (Case Number: 3:14-cv-00720) for $6.8mm which “claimed that the supermarket chain violated the FCRA by failing to provide them with 'stand alone' disclosures before obtaining consumer reports that were used for employment purposes.” (1)

One of the more challenging aspects to remain compliant with FCRA requirements is with key documents. A stand-alone disclosure document is one that maintains a single function of disclosure and does not combine multiple functions of the FCRA requirements into a single document.

Adam Almeida, President and CEO of CriminalBackgroundRecords.com states: “It is critical that an employer understands the function of disclosure, consent, pre-adverse action and adverse action documents, as highlighted in FCRA legislation. Given the complexity of the issue it is easy to make a mistake.”

From The National Law Review (Dec. 01, 14) in reference to the Publix Market case states:

It is common practice for employers to include waiver and release language in FCRA authorization forms; however these cases underscore the importance of maintaining the required FCRA disclosure as a stand-alone document when including release language. (2)
The Publix Super Markets case is but a single example of the litigious environment pre-employment background screening operates within. Another case, Mack v Panera (Case No. 0:14-cv-61672) is currently working its way through the court system and makes similar claims over the incorrect and alleged violation of the FCRA. (3)

Almeida states: “The Publix Super Market case, by itself, highlights the critical and urgent need for companies’ large and small work with qualified third party background screening companies. As a Consumer Reporting Agency, third-party screeners are required to remain fully compliant with all laws and regulations, both at a state and Federal level, as put forth under the guise of the FCRA.”

Failure to comply with components of the FCRA can be a costly mistake.

From The National Law Review (Dec. 01, 14):

Violations of the FCRA are subject to statutory damages between $100 and $1,000 for each willful violation of the Act. In light of these lawsuits, employers who procure consumer reports as part of their background check procedures for employees and applicants should carefully review their FCRA disclosures to ensure compliance with the Act. (4)

A best business practice would be to thoroughly review all documents and forms utilized in acquisition of employees, from the application process through the pre-employment background check.

Almeida states: “In the end employers must ensure documents and forms utilized in employment screening are compliant with the FCRA and based on the Publix Super Market settlement, the time is now to start that process.”

CriminalBackgroundRecords.com is a third-party background screening company whose operators are highly trained with the legal and lawful requirements of the Fair Credit Reporting Act. With access to a wide variety of databases as well as access to county courthouses across the nation, CriminalBackgroundRecords.com can fulfill all pre-employment screening requirements in a legal and compliant manner.

Notes:
1.    lexology.com/library/detail.aspx?g=5da5ffe9-3830-4d47-9dbe-16e9ce351b09
2.    natlawreview.com/article/publix-to-pay-68-million-alleged-fcra-violations
3.    plainsite.org/dockets/2c8eiisdt/florida-southern-district-court/mack-v-panera-llc/
4.    natlawreview.com/article/publix-to-pay-68-million-alleged-fcra-violations

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