Class Action Lawsuit Claims McDonald’s Violated FCRA with Background Checks on Job Applicants

Fair Credit Reporting Act

Written By ESR News Blog Editor Thomas Ahearn

A class action lawsuit filed in a Florida court claims that fast food giant McDonald’s allegedly violated the federal Fair Credit Reporting Act (FCRA) when it conducted background checks on job applicants by failing to obtain proper authorization and disclosure in violation of the FCRA, according to a report from Top Class Actions.

Top Class Actions reports that plaintiff Danny O’Neill claims he and other job seekers were subject to background checks when they applied to work at McDonald’s and were unaware that a consumer report would be pulled because the disclosure in the hiring paperwork contained other distracting information.

Top Class Actions reports that O’Neill – who applied for job with McDonald’s in March 2018 – also claims he and other job applicants subject to background checks during the application process were not properly notified of the consumer report that McDonald’s pulled as required by the FCRA.

The McDonald’s class action lawsuit states: The FCRA… makes is presumptively unlawful to obtain and use a “consumer report” for an employment purpose. Such use becomes lawful if and only if the “user” – in this case Defendant – has complied with the FCRA’s strict disclosure and authorization requirements.

Plaintiff was distracted from the disclosure by the presence of additional information in the purported FCRA Disclosure. Specifically, Defendant unlawfully inserted extraneous provisions into forms purporting to grant Defendant authority to obtain and use consumer report information for employment purposes.

Top Class Actions reports the class action lawsuit against McDonald’s seeks to represent a nationwide Class of all current employees and job applicants who were not provided proper disclosure and authorization under the FCRA and is seeking damages for the alleged violations of the FCRA.

The lawsuit is O’Neill v. McDonald’s Corporation, Case No. 8:18-cv-02038-SDM-AEP, in the U.S. District Court for the Middle District of Florida. The article is available at https://topclassactions.com/lawsuit-settlements/lawsuit-news/855622-mcdonalds-class-action-employee-background-checks-violate-fcra/.

Section 1681b(b)(2) of the FCRA requires users of consumer reports such as McDonald’s to make “a clear and conspicuous disclosure” in writing to consumers before the report is procured “in a document that consists solely of the disclosure” indicating a report may be obtained for employment purposes.

McDonald’s is not the only company to face lawsuit for alleged FCRA violations. In July 2018, a subsidiary of PepsiCo agreed to pay $1.2 million to settle a class action lawsuit that claimed the company violated the FCRA “by procuring background reports for employment purposes without making certain required disclosures.”

Passed by Congress in 1970, the FCRA promotes the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies (CRAs) and is intended to protect consumers from the willful and/or negligent inclusion of inaccurate information in their credit reports.

In May 2016, the U.S. Supreme Court ruled consumers must prove “concrete injury” in lawsuits for alleged “bare” violations of federal statutes like the FCRA in a case, Spokeo v. Robins, involving a man who claimed he suffered an injury when Spokeo published incorrect information about him on its site.

The U.S. Supreme Court stated in its opinion: Article III standing requires a concrete injury even in the context of a statutory violation. For that reason, Robins could not, for example, allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.

In January 2018, the Supreme Court denied a petition for a writ of certiorari that sought a review of its opinion following a ruling in August 2017 by the Ninth U.S. Circuit Appeals Court on remand from the Supreme Court that found Robins had sufficient concrete injury under Article III of the U.S. Constitution.

The fact that employers are still targeted in class action lawsuits for technical violations of the FCRA even after the Supreme Court ruling in Spokeo is one of the “ESR Top Ten Background Check Trends” for 2018 selected by leading global background check firm Employment Screening Resources® (ESR).

“In no way did the Supreme Court decision in Spokeo mean employers could relax obligations for FCRA compliance,” said ESR founder and CEO Attorney Lester Rosen. “Employers must ensure they comply with the FCRA and work with a background screening firm that understands the FCRA inside and out.”

NOTE: Employment Screening Resources® (ESR) reminds readers that allegations alone made in class action lawsuits are not proof that a business or person violated any law, rule, or regulation.

ESR Whitepapers on FCRA Lawsuits

Employment Screening Resources® (ESR) offers two whitepapers by ESR CEO Attorney Lester Rosen about the causes of FCRA lawsuits: “Common Ways Prospective or Current Employees Sue Employers Under the FCRA” and “Common Ways Consumer Reporting Agencies are Sued Under the FCRA.”

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

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