Fair Credit Reporting Act (FCRA) class actions against employers have surged in recent years.
Brett Coburn, partner in Alston & Bird’s Labor & Employment Group, noted that the U.S. Supreme Court could put a dent in FCRA litigation, but if it continues midsize and smaller companies could be at risk.
“They may be going after the really big companies now, but it's going to trickle down,” Coburn said. “To the extent you have any problems, figure them out now and try to fix them.”
Extraneous language in the disclosure, like a release of liability or an at-will employment clause, is low-hanging fruit for FCRA plaintiffs, Coburn said.
“Make the disclosure a simple, free-standing thing,” Coburn said. “By far, the most common mistake is putting too much stuff on the disclosure.”
Many companies look to third parties and outsource the background-check process, and that's fine, Coburn noted. But he advises companies not to “blindly rely” on what their vendors have provided.
“Don't assume it's compliant just because it's coming from a company that works in this space,” Coburn said. “At the end of the day, it's the employer who is going to be on the hook.”
Coburn also cautioned against swift adverse action as a result of a background check report.
“Absolutely don't jump the gun,” he said. “Do not proceed with the adverse action until you have actually waited the reasonable period of time stated in the pre-adverse action notice. Otherwise, the applicant or employee may argue that the time period stated in the notice was just a sham, and that the adverse action was taken prematurely.”
Training employees in proper compliance with the FCRA can help demonstrate that an alleged violation was an isolated mistake, as opposed to a classwide problem, Coburn noted.
“That's a big deal," Coburn said, "whether you're fighting over one guy as opposed to having a class on your hands that could be much, much larger.”