Dollar General is not admitting any wrongdoing, but the retailer has agreed to settle a class action lawsuit that alleges the company violated the Fair Credit Reporting Act.
The lead plaintiff in the case, Jonathan Marcum, says Dollar General violated the law several times by failing to provide proper notice and obtain consent to conduct a pre-employment background check. Marcum also says he didn’t receive a copy of the report, or the subsequent pre-adverse action notice, until three days after Dollar General decided not to offer him a job.
According to the FCRA, an employer must clearly disclose to an applicant that they plan to do a background check as part of the hiring process, and the candidate must sign a consent form. If something negative, or adverse, shows up on the background check that could affect the applicant’s eligibility for hire, the employer must give the applicant a copy of the report, clearly inform them of their rights and give them adequate time to address any mistakes before they can be removed from the pool of possible hires.
In the proposed settlement Dollar General will be required to update its background check notification policy so it is in compliance with the FCRA. They are also paying $4.08 million dollars to be divided among the class and the attorney.
The lawyers are the big winners here taking $1.02 Million. Class members each get between $24 and $53. A Virginia federal court still has to give preliminary approval for the deal.
The lesson here… failing to comply with the FCRA can cost you lots of time, money and aggravation. There really is no reason for your company to make these kinds of mistakes. Take the time to work with your legal counsel and your screening partner to make sure you have the right system in place. The right screening provider will make sure you have all of the correct forms to ensure you are compliant.
Employment Background Investigations is a technology driven leader in domestic and global pre-employment background checks, drug testing, occupational health screening and I-9 compliance. We specialize in development, implementation and management of customized employment screening programs for large and multi-national clients. We are dedicated to information security. EBI is the only NAPBS Accredited background screening company in the world to hold both an ISO 27001:2005 certification for information security and an ISO 9001:2008 certification for Quality Management.
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