Class Action Lawsuit Filed Against Healthcare Provider Over Non-Compliant Background Check Disclosures and Authorizations

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Class Action Lawsuit Filed Against Healthcare Provider Over Non-Compliant Background Check Disclosures and Authorizations
November 21, 2022

A newly filed class action lawsuit against a California healthcare and human services accused of violating the Fair Credit Reporting Act (FCRA). According to the case, the employer failed to comply with the FCRA on several points. These failures pertain to performing employee background checks as part of its hiring process.

The complaint, filed by the US District for the Northern District of California, claims that the employer performed background checks on prospective, current, and former employees without providing relevant disclosures and receiving authorization.

According to the complaint, the issue began when the plaintiff applied for a position with the employer. As a result, the plaintiff received a disclosure and authorization form to perform a background check. However, the disclosure allegedly contained extraneous material that prevented it from meeting the “clear and conspicuous” requirements of the FCRA Section 1681b(b)(2)(A), which also establishes it must be “in a document that consists only of the disclosure.”

According to the complaint, the disclosure did not qualify as a clear, conspicuous, stand-alone document under the FCRA. The plaintiffs cited several issues, including:

  1. An extraneous paragraph, “investigative consumer reports,” that the defendant never attempted to acquire;
  2. The term “acknowledged,” as well as signature lines; and
  3. The disclosure appeared in only a part of the employment application, alongside additional sections.

The lawsuit also alleged that the employer’s actions in violation of the FCRA were willful. Allegedly, the defendants acted in a “deliberate or reckless disregard” for their obligations. Furthermore, the plaintiffs claimed the defendant disregarded the rights of the prospective, current, and former employees, including the plaintiff.

The lawsuit then cited the following as examples of the above claims:

  1. “Defendants’ are large entities with access to legal advice;
  2. Defendants’ required a purported authorization to perform credit and background checks;
  3. in the process of employing the class members which, although defective, evidence Defendants’ awareness of and willful failure to follow the governing laws concerning such authorizations;
  4. The plain language of the statute unambiguously indicates that the inclusion of extraneous information in a disclosure form violates the disclosure and authorization requirements; and
  5. Accordingly, Defendants willfully violated and continue to violate the FCRA including, but not limited to, § 1681b(b)(2)(A).”

The plaintiff intends to represent a class of all applicants and employees who became subjects of background checks from the employer. The involved timeframe for the affected includes the prior five years but may extend until the courts make a final judgment regarding the action.

As this lawsuit shows, employers must ensure compliance with FCRA, state, and federal requirements. The best way to ensure compliance is to work with a trusted and quality screening provider.

Easily verify your employment qualifications when you switch to pre-employment background checks. Talk to a sales representative today.

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