Webinar Examines Explosion of FCRA Lawsuits against Employers

 FCRA-graphic

Written By ESR News Blog Editor Thomas Ahearn

With class action suits against employers who conduct background checks on job applicants mushrooming, Attorney Lester Rosen, Founder and CEO of background check firm Employment Screening Resources (ESR), will host a live webinar with Compliance World entitled “The Explosion of Lawsuits against Employers under the Fair Credit Reporting Act (FCRA) – Traps and Pitfalls to Avoid” on Friday, May 20, 2016, at 2:00 PM EDT / 11:00 AM PDT. To register for this webinar, click here.

“FCRA class action lawsuits against employers have become very common,” explains Rosen, the author of ‘The Safe Hiring Manual,’ the first comprehensive guide to background checks, and a frequent present of FCRA issues for the ‘ESR Speaks’ training program. “Ironically, these class action lawsuits often could have been easily avoided.  More often than not, employers are sued for violating FCRA 101 – simple rules and procedures that are clearly set out in the law.”

In the 90 minute webinar, Rosen will explains how most claims of FCRA violations involve aspects of the employer’s screening process that could be easily remedied to comply with the FCRA, such as reviewing forms used for background checks or  sending the applicant certain information required under the FCRA. To avoid multi-million dollar settlements, Rosen will review several areas where employers should review their practices and procedures to avoid litigation under the FCRA such as:

  • Failure to obtain written authorization from the job applicant to obtain the consumer report or provide a required disclosure  to the consumer;
  • Failure to provide the job applicant with a document consisting solely of the stand-alone disclosure
  • Failure to comply with “pre-adverse action” requirements or allow sufficient time for a consumer to respond.
  • Failure to provide applicant with a post-adverse action notice.
  • Failure to follow state law.

“Part of the reason FCRA class action lawsuits make a tempting target is that the damages being sought can be enormous,” Rosen explains. “Under the FCRA, an allegation of a “willful” violation in a class action lawsuit can results in damages in the amount of $100 to $1,000 for every consumer impacted.  For an employer that handles a large volume, that adds up quickly. In addition, class action lawsuits commonly ask for attorney’s fees and court costs, which can be substantial.”

In 2015, companies such as Food Lion, Home Depot, Chuck E. Cheese, BMW, and Whole Foods paid FCRA lawsuit settlements ranging from $803,000 to $3 million. In 2016, Wells Fargo agreed to a settlement of $12 million to resolve a FCRA lawsuit. Some of these FCRA class action lawsuits are brought against large nationwide companies over technical violations of the FCRA that can include not using a “stand alone” form to get consent for a background check from job applicants.

In response to the rising trend of FCRA class action lawsuits, Rosen has written a whitepaper  “Common Ways Prospective or Current Employees Sue Employers Under the FCRA” that explains how FCRA lawsuits are often filed over alleged technical violations when employers fail to dot the “i’s” and cross the “t’s” in the screening process. The complimentary whitepaper is available at http://www.esrcheck.com/Whitepapers/Ways-Employees-Sue-Employers-Under-FCRA/.

Rosen founded Employment Screening Resources (ESR), a global background check firm located in the San Francisco, California area, in 1997. ESR is accredited by the National Association of Professional Background Screeners (NAPBS) and Rosen was the chairperson of the steering committee that founded the NAPBS and served as first co-chair. He also has qualified as an expert witness on issues surrounding background checks. To learn more, visit http://www.esrcheck.com.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this web site is for educational purposes only.

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