Employers Paid $174 Million Over Past Decade to Settle FCRA Lawsuits Involving Background Checks

Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn             

Employers have paid out $174 million over the past decade to settle class action lawsuits that claim they violated the federal Fair Credit Reporting Act (FCRA) that governs the use of background checks on job applicants, according to a blog examining a compilation of court records assembled by Good Jobs First.

The $174 million total is derived from 146 successful class action lawsuits brought under the employment provisions of the FCRA against companies that use background check reports. Companies providing those reports have paid out another $152 million when they have been sued directly.

The FCRA class action lawsuit case information was assembled by the Corporate Research Project of Good Jobs First as part of the latest expansion of Violation Tracker, the first wide-ranging database of corporate crime and misconduct that is available to the public at violationtracker.org.

“At a time when employers increasingly use background-check reports to screen job candidates, class actions lawsuits have become an important tool to ensure that the rights of applicants are protected,” Good Jobs First Research Director Philip Mattera, who leads work on Violation Tracker, stated in the blog.

More than 40 employers have paid FCRA settlements of $1 million or more since 2011, according to the blog, and large payouts by well-known companies include Wells Fargo ($12 million), Target ($8.5 million), Uber ($7.5 million), Amazon.com ($5 million), Home Depot ($3 million), and Domino’s Pizza ($2.5 million).

Based in Washington, D.C., Good Jobs First is a non-profit and non-partisan resource center promoting accountability in economic development that provides research resources for organizations and individuals concerned about corporate accountability. To learn more, visit www.goodjobsfirst.org.

Passed by Congress in 1970, the FCRA 15 U.S.C. § 1681 promotes the accuracy, fairness, and privacy of consumer information contained in the files of Consumer Reporting Agencies (CRAs) and protects consumers from the willful and/or negligent inclusion of inaccurate information in consumer reports.

The fact that class action lawsuits involving the FCRA will not be the only compliance concern for employers performing background checks in an increasingly complex legal environment was chosen by Employment Screening Resources® (ESR) as one of the “ESR Top Ten Background Check Trends” for 2019.

ESR – a leading global background check firm – offers employers two complimentary white papers to help them comply with the FCRA: “Common Ways Consumer Reporting Agencies are Sued Under the FCRA” and “Common Ways Prospective or Current Employees Sue Employers 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.

© 2019 Employment Screening Resources® (ESR) – Making copies or using of any part of the ESR News Blog or ESR website for any purpose other than your own personal use is prohibited unless written authorization is first obtained from ESR.