Settlement Approved in Lawsuit Over Alleged Inaccurate Background Checks

Accuracy

Written By ESR News Blog Editor Thomas Ahearn

In December of 2019, a federal judge in Pennsylvania gave final approval for a settlement of a class action lawsuit for $562,500 against a “company accused of providing prospective employers with inaccurate criminal background checks,” according to a report on PennLive.com.

PennLive.com reports that U.S. Middle District Senior Judge Yvette Kane ruled that most of the money from the settlement involving the alleged inaccurate background checks “will result in payments pf $333 each to more than 1,000 people whose criminal histories were incorrectly reported.”

PennLive.com reports the lead plaintiff in the lawsuit, T. Jason Noye, accused the background check firm “of misreporting four summary offenses lodged against him as more serious misdemeanor crimes” in the original complaint filed in 2015 which caused a prospective employer to withdraw a job offer.

According to the report, “Pennsylvania law allows prospective employers to consider candidates’ felony and misdemeanor convictions, but not summary convictions, which are the lowest level of offenses in the state’s Crime Code, Noye contended in the suit. Littering and loitering, for instance, are summaries.”

Noye – who PennLive.com reports will receive a $10,000 payment from the settlement for being “the main catalyst for the lawsuit” – said the inaccurate background checks violated the federal Fair Credit Reporting Act (FCRA) that governs the use of background checks for employment purposes in the United States.

Under the FCRA, “Whenever a consumer reporting agency (CRA) prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” A CRA is another term for a background check firm.

Accuracy has become a major issue for both employers and CRAs in FCRA related litigation. In August of 2019, a CRA reached a $3.3 million settlement in a lawsuit that claimed the CRA did not ensure the accuracy of the consumer reports it maintained as required by the FCRA.

In December of 2019, the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) – two U.S. government agencies that enforce the FCRA – co-hosted a public workshop on Accuracy in Consumer Reporting that examined issues affecting the accuracy of consumer reports.

The FTC and CFPB Accuracy in Consumer Reporting Workshop brought together representatives from CRAs, trade associations, furnishers, and consumer advocacy organizations to discuss accuracy issues. A video of the workshop is at https://ftc-workshop-accuracy-consumer-reporting.videoshowcase.net/.

Employment Screening Resources® (ESR) is a CRA that is accredited by the Professional Background Screening Association (PBSA) and undergoes annual SOC 2 audits to ensure the accuracy of results. ESR was also named a top screening firm by HRO Today Magazine. To learn more, visit 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 website is for educational purposes only.

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