Delta Air Lines to Pay $2.3 Million to Settle Background Check Lawsuit for Alleged FCRA Violations

Written By ESR News Blog Editor Thomas Ahearn

On January 3, 2019, Delta Air Lines agreed to pay $2.3 million to settle a class action lawsuit that claimed the major U.S. airline allegedly failed to provide job applicants with a “standalone” background check disclosure in violation of the federal Fair Credit Reporting Act (FCRA) and related California state laws.

Delta $2.3 Million FCRA Settlement

The lawsuit Schofield vs. Delta Airlines, Inc. claimed the background check disclosures Delta used for approximately 44,1000 job applicants allegedly contained extraneous and misleading information and also could not be understood without reading the FCRA, a federal law that governs background checks in America.

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.”

The motion by the plaintiffs in the U.S. District Court for the Northern District of California sought approval of the agreement by arguing that the settlement was reasonable since the gross recovery amount of approximately $52.15 per class member “compares favorably to recent FCRA settlements.”

Delta is not the only company to run afoul of the FCRA. In April 2018, Frito-Lay Inc. paid $2.4 million to settle a lawsuit claiming FCRA violations with improper background check disclosure forms. Omincare paid $1.3 million and a PepsiCo subsidiary paid $1.2 million to settle similar FCRA cases in 2018.

The Equal Employment Opportunity Commission (EEOC) – which enforces federal laws prohibiting employment discrimination – and the Federal Trade Commission (FTC) offer a joint publication entitled “Background Checks: What Employers Need To Know” to help explain background check disclosures.

The publication states: “This notice must be in writing and in a stand-alone format. The notice can’t be in an employment application. You can include some minor additional information in the notice (like a brief description of the nature of consumer reports), but only if it doesn’t confuse or detract from the notice.”

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.

White Papers about FCRA Compliance from ESR

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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