FCRA Class Action Lawsuits: The Most Common Violations
 
The trend continues. Each year, the number of FCRA class action lawsuits filed against employers keeps growing. There is a reason for this, and it probably won’t surprise you. There’s money to be made.
 
With a number of well-publicized high-dollar settlements, including Home Depot’s $3 million and Publix Super Market’s $6.8 million, as well as the potential for additional large payouts, this trend is expected to continue.
 
Despite the high cost of these settlements, they are still “cheap” when one considers what a company could be facing in damages and fines if a judgement is lodged against it. In cases where a plaintiff proves a willful violation of the FCRA, he can recover statutory damages of $100-$1000 per violation, as well as attorney’s fees and punitive damages. These numbers quickly add up as more people are involved, and each case may include a great number of applicants, so the potential for large payouts becomes even more evident.  

 

Generally, FCRA class action lawsuits tend to center around a couple of common violations. These include problems with the disclosure and authorization forms, and not following proper adverse action procedures.

 

Disclosure Form Issues

Many times, the plaintiffs in these types of lawsuits claim that the company did not provide a “stand alone” disclosure. Common claims are that the disclosure was part of the application form or contained extraneous information, such as a release of liability.

 

Another issue regularly cited in these cases is that the plaintiff did not give consent for a background investigation prior to it being done.

 

Adverse Action Issues

The FCRA requires that before rejecting a job applicant, denying a promotion, reassigning or terminating an employee based in whole or in part on information obtained in a consumer report, employers must follow a two-step adverse action process (for more details about the adverse action process, check out the article Adverse Action: What It Is and What You Need to Know). Many FCRA class action lawsuits that claim employers did not follow the adverse action process correctly claim that employers didn’t follow pre-adverse action correctly, did not provide the proper required notices, or did not wait long enough before sending the final adverse action notice.

 

Protecting Your Organization

Some of the steps you can take to protect your company include reviewing your consent forms and your organization’s adverse action process. Make sure that your disclosure forms do not include extraneous information, and ensure that they are signed prior to ordering a background check. You should also carefully review your adverse action process, making sure you are waiting the proper amount of time and that you are including all proper notices. It may also be beneficial for you to consult with a qualified background screening organization and/or legal expert to ensure your organization is in compliance with federal, state and local laws and regulations.


Uber Settles Lawsuit over Driver Background Checks for $10 Million, May Have to Pay as Much as $25 Million

In April, ride share company Uber agreed to pay at least $10 million to settle a lawsuit that alleged it misled passengers about the quality of its background checks. District attorneys in Los Angeles and San Francisco led a lawsuit that said Uber made false claims that the criminal screening of its drivers was the most comprehensive available.
 
The lawsuit was filed in 2014, with prosecutors alleging that the background checks were not as good as those that taxi drivers underwent because Uber did not check fingerprints for past convictions. Uber did not admit any wrong-doing in the settlement.
 

If Uber does not comply with all of the terms of the settlement, it may have to pay an additional $15 million.


Proposed Ohio Background Legislation
 
Ohio legislators are considering new legislation that would affect when employers can gather or request personal information such as Social Security number, date of birth, and driver’s license number from job applicants.
 
Employers would not be permitted to request this information prior to making an offer of employment, unless it is sought to conduct a criminal background check, credit check, driver’s record check or a check of the employer’s own records. This would likely require employers to make changes to their initial job applications and, potentially, make changes to their on-boarding process.
 
The bill also includes provisions for the “retention, disposition, access, and confidentiality” of the information collected on the part of the employer.

 

The law would affect employers with at least 15 employees and also provides the opportunity of aggrieved individuals to sue employers for violations.

 

At this time, this is just a proposed law, but it does have some bi-partisan support. The bill is currently in committee and may be revised before passage, if it gets that far. Corporate Screening will continue to monitor this legislation. You can read the full text of the law here.


Compliance News
"Ban the Box" Updates


As of April, 2016, the National Employment Law Project (NELP) reports that over 100 cities and counties have adopted “ban the box” legislation, which is designed to remove barriers to employment for qualified workers with criminal records. And 23 states have enacted laws prohibiting public employers from asking about criminal history on the application. In 2016 alone, the states of Missouri, Oklahoma, Tennessee and Wisconsin have adopted such policies.

Taking it even further, seven states have enacted laws that prohibit private employers from asking about criminal convictions on job applications. “Ban the Box” legislation continues to gain support and momentum, and it’s important that employers remain informed and familiarize themselves with any state and/or local laws that affect them, and review and amend their hiring policies and procedures to comply with the regulations. Here are some recently passed legislation.


Missouri Governor Signs Executive Order Affecting Public Employment
On April 11, 2016, Missouri Governor Jay Nixon signed an executive order that requires all departments, agencies and boards of the state’s executive branch to remove questions about criminal history from initial employment applications.


Austin, Texas Passes the “Fair Chance Hiring Ordinance”
In April, the Austin City Council passed the “Fair Chance Hiring Ordinance.” The ordinance affects private employers with 15 or more employees and prohibits them from conducting a background check until after a conditional job offer has been made. For specific details, please visit Corporate Screening’s Client Alert, New “Ban the Box” Ordinance in Austin, Texas, Affects Private Employers.


OPM Proposes “Ban the Box” Rule for Federal Jobs
On April 29, 2016, the Office of Personnel Management (OPM) proposed a rule that would ensure applicants with a criminal past would have a fair shot at competing for federal jobs. The directive would delay the point in the hiring process when federal agencies could ask about an applicant’s criminal history until after a conditional job offer has been made. For details visit the Federal Register.


Vermont
In May, Vermont governor Peter Shumlin signed a bill that requires all employers in Vermont to remove questions about criminal records from their initial job applications. It follows an executive order signed in 2015 that implemented the policy for state jobs. Specifically, employers cannot inquire into the criminal history until the interview, or once the prospective employee has been deemed otherwise qualified for the position. The law will go into effect in July 2017. Details are available at on the Vermont Legislature website.

 
Connecticut
On June 1, 2016 Connecticut’s governor Dannel Malloy signed a new “ban the box” law that prohibits most employers about asking about criminal history on the initial job application. The law includes private employers with one or more employees, and goes into effect on January 1, 2017.

The new legislation states: “No employer shall inquire about a prospective employee’s prior arrests, criminal charges or convictions on an initial employment application, unless (1) the employer is required to do so by an applicable state or federal law, or (2) a security or fidelity bond or an equivalent bond is required for the position for which the prospective employee is seeking employment.”

For more details, please visit Corporate Screening’s client alert.


As a reminder to employers, Corporate Screening recommends you review your applications and hiring policies, and stay abreast of local and state laws to ensure that you are not in violation of any “ban the box” laws that may apply to your business. As always, if you have questions or concerns, we are here to help.

Background Screening in the News 
 
Background Screening in the News is a section devoted to newsworthy events related to background screening. We’ll briefly summarize a few of the news-worthy topics in the industry so that you know what’s trending in the background screening world.
 
Federal Audit Finds CMS Background Check Gaps
In April, a report released by the Government Accountability Office (GAO) indicated that 66 providers with criminal backgrounds enrolled in Medicare before the Centers for Medicare & Medicaid Services (CMS) improved its background check process in 2014. According to an article from McKnight’s.com, the providers are potentially ineligible, and types of crimes they committed included drug and sexual offenses, obscene communications and income tax evasion. CMS will further investigate these providers.
 
Census Bureau Settles Class Action Lawsuit over Criminal Background Checks
The U.S. Census Bureau agreed to pay $15 million to settle a class action lawsuit that claimed the agency discriminated against black and Hispanic job applicants with arrest records during the 2010 census. The Census Bureau required applicants flagged for having criminal histories 30 days to provide paperwork explaining the record. Applicants who were unable to provide the paperwork were rejected. The plaintiffs claimed that the process had a disproportionate impact on minorities, who are more likely to have criminal histories than applicants of other races.
 
In addition to the settlement, the Census Bureau must hire industrial organization psychologists to design new criteria for criminal background checks during the 2020 census in order to limit disparate impact on job applicants. The Census Bureau admitted to no liability under the settlement.
 

FTC Issues Business Guidance for Background Screening Companies

The FTC recently issued guidance for background screening organizations in complying with the Fair Credit Reporting Act (FCRA). Titled What Employment Background Screening Companies Need to Know About the Fair Credit Reporting Act, the guidance first defines what a Consumer Reporting Agency (CRA) is, then provides guidelines about accuracy, getting certifications from clients, providing clients with FCRA information, and the rights of applicants and employees.


Proposed Law in Ohio Would Mean Additional Requirements for Pharmacy Technicians
 
Ohio lawmakers are responding to reports of increasing drug addiction with a provision that would add more oversight to pharmacy technicians. According to the Statehouse News Bureau, there are more than 42,000 pharmacy techs in the state, and their work includes entering computer data; counting pills and putting them into a vile, as well as other tasks. And the Ohio Board of Pharmacy estimates that technicians may account for a third of all drug thefts from pharmacies.

The legislation, proposed by the Kasich administration, would require pharmacy technicians to register with the state and is intended to help provide oversight to the field. Doing so is intended to reduce the chance that a background check would miss previous drug theft violations.

Background Requests, Simplified 
 
Corporate Screening offers a variety of ordering options to meet the unique needs of your organization.
 

Choose from our Online or Upload Ordering options or allow your candidate to handle the data entry through our candidate invitation option. We also offer integrations with your ATS/HRIS systems to provide the most streamlined and efficient process possible. Whatever method you select, these ordering options ensure that your background checks begin faster, your orders are more accurate and your results are returned sooner.

 

Invite Order

Want your candidate to complete the necessary information for the background order? Use the “Invite Order” option. When you log in and select “Invite Order’ you’ll simply enter the candidate’s name and email address, select your package and any additional products, and click on “Send to Candidate.” Your candidate will receive an email message, asking them to complete the required information. Once the necessary information is completed, Corporate Screening will initiate the background.

 

Online Order

Online ordering is another option that can help you save time and gives you more control. You initiate the background check and expedite the ordering process. Enter the applicant information, select the background screening package you require and submit the information. You can even upload supplemental documents, such as a copy of the signed release.

 

Upload Order

This option allows you to just enter some basic information about the applicant and upload the attachments that you would have emailed. When you hit send, the information is transmitted safely and securely to Corporate Screening.

 

ATS/HRIS Integrations

Are you using an ATS/HRIS system? Streamline your background screening process using one of Corporate Screening’s integration solutions, and order and receive reports directly through your preferred system with a single sign-on. We offer integrations with Oracle Taleo, Workday, iCIMS, Healthcare Source, Technomedia, HR Logix and others. Our technology will meld seamlessly with your system, and will help speed up the hiring process.

 

For more information about any of these ordering options, we encourage you to contact your account representative or contact us directly at 800-229-8606.


VerifyStudents Corner
Student Background News
Corporate Screening and ACEMAPP Partner to Deliver A First of Its Kind Suite of Services
 
Partnership provides schools and clinical sites with an integrated suite of background check, drug screening and immunization tracking services coupled with clinical rotation and student onboarding management.
 
Corporate Screening is pleased to announce its partnership with ACEMAPP, a leading clinical rotation matching and placement program. Together, the companies offer colleges and clinical sites a single source for coordination and management of student rotations and compliance requirements, including background checks, drug screening and immunization tracking.
“The integration of Corporate Screening’s VerifyStudents suite of services with ACEMAPP’s matching and placement program creates an unmatched system for managing student clinical site experience and requirements,” remarked Matt Jaye, Vice President of Sales at Corporate Screening. “Authorized administrators from both the college and clinical site will be able to easily log-in to one site to see the status of student background checks, drug tests and immunization/health requirements. It will offer them an even more streamlined and efficient process, which will mean fewer administrative hours spent on what can be a time-consuming process.”

ACEMAPP is a secure, online, clinical rotation matching, student on-boarding, and document storage solution for clinical sites, schools and consortiums. The organization coordinates clinical rotation experiences across multiple professions.

VerifyStudents by Corporate Screening is a fully integrated web-based solution that provides reliable and secure student background checks, immunization tracking and paperless self-scheduled drug screening. Adding these features to ACEMAPP’s solution makes it even easier for everyone involved to determine a student’s progress in meeting clinical requirements.

“Our vision is to bring all components needed to arrange, prepare and manage clinical rotations into one place, thereby streamlining the process for school and hospital administrators as well as students, faculty and preceptors.” said Stacy Gradowski, Director of ACEMAPP. “This integration with Corporate Screening brings in the ever important screening component, having the ability to manage this inside ACEMAPP will save our users time, stress and bring in even greater accountability.”

“We expect that program managers at schools, as well as clinical site administrators will benefit substantially from this partnership,” added Jaye. “Corporate Screening is proud to partner with ACEMAPP, and together we look forward to providing an even better experience for schools, clinical sites, students and faculty.”

Answering Program Managers' Questions
 
Why is VerifyStudents by Corporate Screening the student background product of choice for many of the nation’s colleges and universities? Dependable products and services are just one reason. Providing outstanding customer service and helping to answer questions is another. Here are a few questions and answers about why schools should select VerifyStudents for their students.
 
Q. Why should my school use VerifyStudents by Corporate Screening?
A. First, our experience. In business for nearly 30 years, Corporate Screening understands the background screening process, and our consultants work with each schools and its clinical sites to set up a customized program designed to meet their unique needs. We specialize in the healthcare industry, ensuring compliance with local, state, federal and institutional regulations. And our professional analysts and consultants deliver high-quality, accurate screening results.

 

Second, VerifyStudents is cost-effective, saves time and is easy to use. There is no cost to the school, no set up fees, and no special software to purchase. Students appreciate the ease with which they can create their profile, provide the necessary information for the background check, and make payment online within the secure VerifyStudents interface. Administrators appreciate the cloud-based program that allows them to access information any time, as well as our professional analysts and support team, who are happy to help if questions arise.

 

Q. What products and services are offered through VerifyStudents?

A. VerifyStudents offers a full suite of products and services, including student background checks, immunization tracking, paperless drug testing, and fingerprinting. Click here to find out more about our products and services.

 

Q. What about accreditation? Is Corporate Screening an accredited background screening provider?

A. The National Association of Professional Background Screeners (NAPBS) offers an accreditation program, which entails a rigorous auditions process of policies and procedures. While many background screening companies are members of the NAPBS, less than 10 percent of organizations are accredited. Corporate Screening is proud to be an NAPBS accredited company, which indicates our commitment to excellence, accountability and high professional standards.

 

For more information about VerifyStudents by Corporate Screening, contact us toll free at 888-464-0621 or email us at Sales@CorporateScreening.com.