Last updated on 12-1-2023.
Employers should be wary of the increasing number of Fair Credit Reporting Act (FCRA) lawsuits brought against them. The FCRA is full of potential obligations for employers that obtain FCRA regulated background reports (called “consumer reports” under the FCRA) on their applicants and employees. It can be challenging for employers to determine whether they are meeting all their obligations under the FCRA (as well as under comparable state and local laws).
In a recent case, Schofield v. Delta Air Lines, Inc., No. 3:18-cv-00382-EMC, USDC, ND Cal., Feb. 27, 2019, Delta Air Lines, Inc. (Delta) was accused of, among other things, obtaining consumer reports on applicants and employees without providing them with proper disclosures and without receiving appropriate authorizations in violation of the FCRA (as well as California state law). The lawsuit alleged that Delta’s disclosures were not clear and unambiguous, contained extraneous information, and were not in stand-alone documents.
Some quick facts about the lawsuit, and the settlement agreement:
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- The potential class included approximately 41,000 current and former Delta applicants and employees.
- Delta agreed to settle the lawsuit for $2.3 million.
- The total settlement could increase if the class grows any larger – if the class exceeds 46,000 current and former applicants and employees, Delta agreed to supplement the settlement fund by $50 per person for each person in excess of 46,000.
This case, with its large settlement amount, should serve as a cautionary tale for all employers: if you are going to obtain consumer reports for employment purposes, be sure that you:
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- Provide the applicant/employee with a clear and conspicuous disclosure in a document that consists solely of the disclosure that you may obtain a consumer report about them for employment purposes;
- Get written authorization from the applicant/employee to obtain the consumer report; and
- Comply with any other employer obligations under the FCRA and applicable state and local law.
Verified Credentials will continue to notify you of any significant changes in the laws, or major lawsuits, surrounding background checks as it becomes aware of them. However, as always, you should discuss your background screening program with your legal counsel to make sure that you remain on the right side of the developing area of background screening law.
