The Fair Credit Reporting Act (FCRA) requires that, before conducting background checks on prospective employees, employers must disclose that they may conduct the investigation. The disclosure has to be a stand-alone document that is for the sole purpose of conveying the information, and must also include the potential hire’s written consent.
But what if an employer embeds a background check disclosure within another employment-related document, like a job application or employment contract?
This type of disclosure violates federal law, and legal action can be taken against the employer (or potential employer) for not abiding by the FCRA background check requirements.
Lawsuits recently filed against two well-known companies — Chipotle Mexican Grill, Inc. and Universal Studios Orlando — show just how common it can be for an employer not to use the appropriate background check disclosure.
In the case against Chipotle, a potential hire filed a putative class action alleging the restaurant chain uses an improper disclosure. According to reports, Chipotle asks job applicants to consent to a background check through an embedded provision on its employment application. The complaint, filed in a California federal court, claims the background check disclosure is surrounded by other, distracting language and is not a separate document, as required by the FCRA.
Similar to the Chipotle suit, the putative class action against Universal Studios Orlando accuses the theme park and resort of not properly disclosing its use of credit reports to make employment decisions. According to Law 360 (subscription required), a Universal Studios job applicant filed the complaint, claiming the theme park violated the FCRA by not providing prospective and current employees a document that states it may obtain a credit report for employment purposes. The complaint against Universal, filed in a Florida federal court, also alleges the company did not provide any disclosure before actually obtaining credit reports, and did not provide a copy of reports to current and potential workers, depriving them of their opportunity to respond before adverse employment action was taken.
The attorneys in Sommers Schwartz’s Employment Litigation Group are knowledgeable in all aspects of the Fair Credit Reporting Act. If you suspect an employer or potential employer has unlawfully obtained and used your credit report to make an employment-related decision, please contact us to learn how we can help.