7-Eleven Agrees to Pay Nearly $2 Million to Settle Class Action Lawsuit for Alleged FCRA Violations

Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn             

7-Eleven Inc. has agreed to pay nearly $2 million to settle a class action lawsuit that claimed the company allegedly violated the federal Fair Credit Reporting Act (FCRA) by failing to provide a “standalone” notice of background checks to approximately 60,000 job applicants, according to a report from Top Class Actions.

Top Class Actions reports that under the terms of the proposed settlement in the class action lawsuit Edwardo Munoz v. 7-Eleven Inc., “7-Eleven will establish a settlement fund of $1,972,500 to compensate Class Members.” The hearing for preliminary approval of the settlement is scheduled for July 15, 2019.

Plaintiff Munoz claimed 7-Eleven – which does not admit to any wrongdoing but agreed to settle the lawsuit to avoid litigation – violated the FCRA by not providing a “standalone” notice to individuals to let them know that the company would be conducting a background check, Top Class Actions reports.

Under FCRA 15 U.S.C. § 1681b(b)(2)(A)(i), it is unlawful to procure a consumer report for employment purposes without “providing a clear and conspicuous disclosure in writing in a standalone document before the report has been pulled that a consumer report may be obtained for employment purposes.”

7-Eleven is not the only company to settle an FCRA lawsuit for improper background check disclosure forms. In January 2019, Delta Air Lines agreed to pay $2.3 million to settle a similar lawsuit. Frito-Lay Inc. paid $2.4 million, Omincare paid $1.3 million and a PepsiCo subsidiary paid $1.2 million to settle FCRA disclosure lawsuits in 2018.

Employers have paid out $174 million over the past decade to settle class action lawsuits that claim they violated the FCRA that governs the use of background checks on job applicants in the United States, according to an examination of 146 successful FCRA class action lawsuits assembled by Good Jobs First.

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 “ESR Top Ten Background Check Trends” for 2019.

Employment Screening Resources® (ESR) can help employers remain in FCRA compliance with the two complimentary white papers “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.

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