Business Agrees to Pay $600,000 to Settle FCRA Class Action Lawsuit

Written By Digital Content Editor Thomas Ahearn

A business service provider that creates employment for people with disabilities has agreed to pay a $600,000 settlement to resolve a class action lawsuit for alleged violations of the federal Fair Credit Reporting Act (FCRA) with “insufficient background check disclosures,” according to a report from TopClassActions.com.

The FCRA requires employers to inform applicants and employees in writing that they can use information from a background check to deny or terminate employment. Employers must also get written permission from applicants and employees before having a screening company perform a background check.

The business failed to give applicants and employees proper disclosures when running background checks on them and these insufficient disclosures allegedly violated the FCRA, TopClassActions.com reported. Although the business did not admit any wrongdoing, it agreed to resolve the allegations with a $600,000 settlement.

TopClassActions.com reported that the $600,000 FCRA settlement will benefit individuals who were subject to a background check report obtained by the business related to a job application or employment between January 28, 2015, and December 31, 2021. More information about the settlement is available here. 

The FCRA was enacted by Congress in 1970 to promote the accuracy, fairness, and privacy of consumer information contained in the files of screening companies, and to protect consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports. A copy of the FCRA is available here.

Employment Screening Resources (ESR) is a service offering of ClearStar, a leading Human Resources technology company specializing in background checks, drug tests, and occupational health screening. ClearStar provides background check services for employers that comply with the FCRA. To learn more, contact ClearStar.

NOTE: Employment Screening Resources (ESR) – a service offering of ClearStar – 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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