Businesses have always had to worry about frivolous lawsuits. Con-artists “slip” and fall, others find a bug in their food. Sometimes the hot coffee is just too hot. All of these kinds of things have cost companies money over the years, but now some of those who are out to make a quick buck are evolving.
One such character is being called a “Professional Plaintiff”— and that is how we will refer to him. Over the years this guy has applied for hundreds of jobs. He is not looking for a job. Instead, he is hoping to find any small infraction in the hiring process that would allow him to threaten a class-action lawsuit and demand a settlement.
The big fish that brought the plaintiff’s plan into the light is Time Warner Cable. Over 18 months he applied for 562 jobs with the company. Instead of accepting one of the positions, he sent a letter to the company saying he planned to sue over violations of the Fair Credit Reporting Act – unless the company was willing to pay him a six-figure settlement to go away. Time Warner has claimed the plaintiff doesn’t really care about other applicants since he is pushing for a settlement that will all go into his pockets.
Time Warner is not the only victim. This Professional Plaintiff has admitted he has pulled the same thing with more than 40 companies. Many have paid him off to avoid the legal bills. Time Warner refused to settle quietly. The cable company filed a motion to stop the Professional Plaintiff from leading a class action. The 9th Circuit granted the defendant’s motion to dismiss. The motion was based upon the Supreme Court’s Spokeo decision earlier this year that says a plaintiff must be able to show they have suffered concrete harm in order to lead a class action suit.
Regardless of the dismissal, the moral of this story is the same for companies big or small. You must make sure your disclosure and authorization for background checks and credit reports are clear, conspicuous and contain NOTHING that could be considered extraneous information. The Professional Plaintiff reportedly taught himself how to spot these easily avoidable FCRA violations. The moment he would find one, he would threaten to sue -- not just for himself, but on behalf of all recent applicants. If these kinds of cases go to trial, a company could be ordered to pay up to $1,000 per person. This is why so many companies just paid up.
Related Video: FCRA Compliance: Lawyers Fishing for Big Lawsuits
This guy is not alone. According to WebRecon, a company that tracks consumer litigation, the number of FCRA class-actions lawsuits doubled from 2014 to 2015. That means all companies need to be aware of this kind of fishing. Your attorney or your background screening provider will be able to review your documents to make sure you are not leaving a door open for these modern-day blackmailers.