Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

On August 7, 2020, the U.S. District Court for the Southern District of New York certified a proposed $1.28 million class settlement to resolve claims that Madison Square Garden (MSG) violated the federal Fair Credit Reporting Act (FCRA) by denying employment based on findings in criminal background checks, Bloomberg Law reported.

The court gave final approval to an “FCRA settlement class of 508 members denied employment with MSG based on findings in their criminal background check reports,” Bloomberg Law reported, while a subclass was comprised of members denied employment as a result of their failure to fully disclose criminal histories.

In July 2019, ESR News reported that Madison Square Garden agreed to pay nearly $1.3 million to settle a class action lawsuit that claimed the arena “imposed too strict of requirements for criminal disclosures that had a disparate impact on minority applicants,” according to a Consumer Financial Services Law Monitor article.

Consumer Financial Services Law Monitor reported that “Plaintiffs Clint Millien and Felipe Kelly sued Madison Square Garden for its hiring practices relating to applicants’ failure to disclose previous criminal activity when applying for food preparation positions.” The claims were based on two theories of liability:

  • First, they contend that Madison Square Garden’s practice of revoking conditional employment offers based on a failure to disclose previous criminal history had a discriminatory impact on African-American and Latino applicants.
  • Second, they claim that Madison Square Garden routinely failed to provide applicants with copies of their background screening reports before denying them employment, as required under the Fair Credit Reporting Act and the New York Correction Law.

Madison Square Garden – an indoor arena in New York City that has denied any wrongdoing in the matter – “agreed to pay $519,800 in relief to putative class members and $750,000 in attorneys’ fees” and to “make substantial changes to its hiring policies,” the Consumer Financial Services Law Monitor reported in July 2019.

Enacted by Congress in 1970, the FCRA promotes the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies (CRAs), protects consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, including consumer credit information.

Employment Screening Resources® (ESR) – a leading global background check provider – offers FCRA-compliant background screening solutions as well as whitepapers on how employers may avoid FCRA lawsuits and on how CRAs may avoid FCRA lawsuits. To learn more about ESR, 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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