With data pointing to a nationwide increase in Fair Credit Reporting Act (FCRA) class actions in 2014. Brett Coburn, a partner in the firm’s Labor & Employment Group, discussed the rise of such lawsuits and how companies should prepare.
Considering the vagaries of the law and plaintiffs’ success, “I don't think [the number of FCRA class actions is] going to level off eventually,” says Coburn. “I’ve certainly seen companies that are not doing everything correctly” in terms of complying with FCRA regulations.
The first step toward ensuring the organization’s hiring practices meet FCRA standards is “to know what the law is,” says Coburn.
“It’s important for the responsible people—HR, legal counsel—to understand the requirements well and thoroughly. I can’t tell you how many [job] application packages I’ve seen that contain consent forms to run a background check but don’t contain a disclosure of rights,” he said. “That shows me that someone has some sense they have to make disclosures, but didn't know the law well enough to do it correctly.”
The FCRA can vary by state—and even by city—so it’s important for a company’s HR leaders and legal counsel to adjust accordingly. One of Coburn’s retail clients operates in three jurisdictions with “ban the box” laws.
“The company’s HR team in each place knows that, and they’ve changed the applications for their stores in these locations to comply with [local] laws.”
With regard to conducting such reviews, there’s no time like the present, adds Coburn.
“Companies would be well-advised, in this current legal environment, to consider doing a hiring practices audit,” he says. “Look at the various steps and aspects of the hiring process, including ban the box legislation and other relevant issues. Now is a very wise time for companies to do that.”