A large staffing agency agreed to a class settlement after claims of how it violated the Fair Credit Reporting Act (FCRA) through its hiring and firing practices. The staffing agency must pay  $350,000. The class comprised those who applied for employment and those already employed by the company. The claim states these employees were contingent or suffered harm from adverse actions taken by the staffing agency based on background checks. In addition, the staffing agency did not provide the plaintiffs with copies of the information between April 4, 2017, and March 23, 2022.

The class action claimed that a large staffing agency failed to comply with FCRA by taking adverse action against employees or applicants before providing them with the required notice or a copy of their background report.

The lawsuit clarified how the FCRA requires employers to adhere to FCRA requirements before making employment decisions based on consumer reports. These decisions include but are not limited to: Providing workers with a notice of adverse action based on the information, a summary of rights under the FCRA, and a copy of the worker’s consumer report. 

The lawsuit alleged that the staffing agency refused the plaintiff a job due to information in his background report without complying with the FCRA requirements.

According to the lawsuit, the plaintiff acquired a warehouse job through the staffing agency, then informed he was ineligible to continue working after a few months because of a failed background report. The plaintiff claims there was no pre-adverse action notice and copy of his consumer report before the termination of employment.

The lawsuit claimed that the plaintiff was harmed by not having the opportunity to contest or discuss the information obtained in the consumer report. The plaintiff also had no chance to ensure the information was correct. Additionally, the plaintiff was left wondering if there were inaccuracies in the consumer report and if it would affect his chances of obtaining employment elsewhere.

This case shows the importance of complying with the FCRA. Failure to comply with the Act can result in lawsuits and potentially large settlements. Therefore, one of the best ways to ensure that your organization remains compliant with the FCRA is to partner with a screening provider you can trust to stay up to date with the ever-changing legal landscape regarding this Act.

You can learn more about Adverse Action Notice Protocols in Compliance With FCRA by downloading Pre-employ’s free guides and resources.

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