More FCRA Woes...

paramount-FTCParamount Pictures specializes in the world of make believe, but a class action lawsuit against the entertainment giant is very real.  The corporation is the latest in a long line of household names to be sued for allegedly violating the Fair Credit Reporting Act.

Peikoff v. Paramount Pictures Corporation was filed on January 7, 2015.  It raises two questions about the FCRA consent form used for employees and potential employees. First, the disclosure stating that a background check was going to be performed and used for employment purposes was not on a distinct form separate from everything else.  That form also allegedly contains superfluous language, including a general release of liability, which is not allowed.  The form must clearly offer only the disclosure and the authorization… that’s it.

The class is estimated to be more than 500 members.  Paramount faces statutory damages from $100-$1,000 per violation.  There could also be punitive damages and, of course, legal fees.

Crafting superstore Michaels is being sued over similar FCRA violations.  The named plaintiff Christina Graham alleges that the retailer didn’t tell employees that they were conducting background checks as part of their pre-employment screening process. 

According to the lawsuit, the only disclosure was at the very end of the job application, buried on a page that asks for previous work experience, lists 10 notices of different state laws regarding conviction records, and other unrelated items.  Again, the key to these disclosures is that they should be clear, unambiguous and they must stand alone.

Several very large employers were hit with FCRA lawsuits last year, including grocery giants Whole Foods and Publix. Publix agreed to pay more than $6.8 million to settle its suit.  

If you have questions about your obligations under the FCRA, please discuss them with your attorneys and your screening provider.  For some reason, even with all of the newsworthy violations and all of the expensive legal advice, huge players are continuing to make mistakes.  There is no reason for this.  A quick review of your policy and documents can make sure you are in compliance and protect you from large financial penalties down the road.

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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.

All content provided by EBI is published for the convenience of its readers and should never be deemed as legal guidance or advice.  Always consult your legal counsel for specific advice on state laws and industry regulations

Jennifer Gladstone

Posted By: Jennifer Gladstone

Jennifer Gladstone is a news anchor and journalist with more than 20 years of experience in front of the camera. She's worked in several markets, large and small, and has performed nearly every task needed in a newsroom. As EBI’s Screening News Editor, she keeps EBI’s customers and blog subscribers up to date on the latest screening news and legislative alerts affecting companies of all sizes.


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