Judge Approves Proposed $1.3 Million Settlement for Alleged FCRA Violations with Background Checks

Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

In August 2018, a California federal judge preliminarily approved a proposed $1.3 million class action lawsuit settlement against an American company working in the healthcare industry for alleged violations of the federal Fair Credit Reporting Act (FCRA) and state law caused by the company’s background check authorization practices, according to a report from Top Class Actions.

Top Class Actions reports that plaintiff Ijeoma Esomonu claims she was required to fill out and sign a background check authorization form and a liability waiver when she applied to work for defendant Omnicare. According to the class action lawsuit, the disclosures required under the federal FCRA were “embedded with extraneous information” instead of in a stand-alone document as required by the FCRA.

Top Class Actions reports that Esomonu claims Omnicare violated federal and state law since the disclosures did not meet FCRA requirements. U.S. District Judge Haywood S. Gilliam Jr. granted Esomonu’s motion for preliminary approval of the settlement and Class Members include anyone who received background check disclosure forms for a consumer report procured by Omnicare from May 4, 2010, to May 25, 2018.

In May 2016, the United States Supreme Court ruled consumers must prove “concrete injury” in lawsuits for alleged “bare” violations of federal statutes like the FCRA in the case of Spokeo v. Robins which involved a man who claimed he suffered an injury when incorrect information about him was published online. The U.S. Supreme Court found “Article III standing requires a concrete injury even in the context of a statutory violation.”

The fact that employers are targeted in class action lawsuits for technical violations of the FCRA even after the Supreme Court ruling in the Spokeo case is one of the ‘ESR Top Ten Background Check Trends’ for 2018 selected by Employment Screening Resources® (ESR), showing that employers need to ensure that they are in compliance with their FCRA obligations and work with a screening provider that understands the FCRA.

“In no way did the Supreme Court decision in the Spokeo case mean employers could relax obligations for FCRA compliance and it did not mean employers had the right to ignore the technicalities of the FCRA,” explained Attorney Lester Rosen, founder and Chief Executive Officer (CEO) of ESR and author of the ‘The Safe Hiring Manual,’ the first comprehensive guide to background checks for employment purposes.

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

ESR White Papers on FCRA Lawsuits

Employment Screening Resources® (ESR) – a global background check firm – offers two complimentary whitepapers written by ESR founder and CEO Attorney Lester Rosen that examine the many causes that lead to FCRA class action 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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