Illinois Becomes the Second State to Enact Broader Regulations on AI
Illinois Governor J.B. Pritzker signed House Bill 3773 into law on August 9, 2024, expanding the state’s regulations on the use of artificial...
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Verified Credentials Apr 9, 2021 12:00:00 AM
The Fair Credit Reporting Act (FCRA) outlines the fundamental federal requirements for employment background checks done by consumer reporting agencies. No company wants to face the consequences of a violation. But the truth is, sometimes it happens. In those cases, employers may face litigation.
The requirements of the FCRA can be difficult to navigate. One of the most confusing, and litigated, requirements for employers under the FCRA are the disclosure and authorization requirements, as we have previously discussed. We have seen litigation surrounding FCRA-required disclosures in Gilberg v. California Check Cashing Stores, LLC and Walker v. Fred Meyer, Inc. In February, another company settled after an accusation of similar violations.
Quantum Global Technologies, a cleaning contractor based in Pennsylvania, found themselves in a tough spot. A former employee filed a class action complaint alleging the company violated the FCRA based on a disclosure form that Quantum used that reportedly included an extraneous liability waiver.
The complaint accused Quantum of requiring all prospective employees to sign a standard form authorizing a third-party background check. Because Quantum’s form included a liability waiver, in addition to a disclosure concerning a consumer report, the class action complaint alleges that Quantum violated the FCRA’s stand-alone disclosure requirement and, as a result, Quantum never received proper authorizations for any reports it obtained using its standard form. The named plaintiff also claimed that he was confused by Quantum’s standard disclosure and authorization form and did not understand that Quantum would be requesting a consumer report as defined by the FCRA.
In this case, Quantum and its former employee ended up settling. On February 16, 2021 the settlement was approved by a federal judge. Quantum will pay $174,980 as a class settlement for the alleged violations.
The amount that Quantum has agreed to pay is extensive, but case settlements can certainly exceed this amount. To avoid potential issues, employers should work with their legal advisor to ensure their disclosures meet federal, state, and local requirements.
Illinois Governor J.B. Pritzker signed House Bill 3773 into law on August 9, 2024, expanding the state’s regulations on the use of artificial...
Montana has joined the growing list of consumer data privacy laws enacted throughout the country, creating new guidelines for consumer data privacy. ...
Signed into law on September 12, 2024, New Jersey enacted a new background check bill that mandates criminal history background checks for a broader...
You’re probably aware of the federal Fair Credit Reporting Act (“FCRA”) disclosure and authorization requirements for employers that want to obtain...
The Ninth Circuit Court of Appeals has recently issued a few well-publicized decisions on Fair Credit Reporting Act (“FCRA”) disclosure and...
We’ve highlighted many cases of companies accused of violating the Fair Credit Reporting Act (FCRA). So many of these situations fall back on ...