Old FCRA Case Settled, New One Springs Up

About 5 min

Old FCRA Case Settled, New One Springs Up


Screening News Update - October 2, 2015

  • Whole Foods Settles FCRA Class Action
  • Universal Theme Park Latest FCRA Class Action
  • Delaware Governor Signs Child Protection Act

Whole Foods Settles FCRA Class Action

After asking a judge to dismiss a class action case earlier this year, health food giant Whole Foods has now agreed to settle. Nearly 20,000 employees and prospective employees took part in the suit. They claimed the retailer violated the FCRA by not having a valid authorization form to alert applicants that the company would be ordering background checks as part of the process. The named plaintiff alleged the online form had extraneous information, including a release of liability for Whole Foods and the companies providing the information.

According to the settlement, the retailer will pay $803,000 to the class. That works out to about $24 a person. Whole Foods still denies any wrongdoing and will not concede that there was anything wrong with their documents. Had they been found liable by a jury the penalty could have been much steeper.

Universal Theme Park Latest FCRA Class Action

As Whole Foods wraps up its case, the parent company of Universal Studios Orlando has a legal battle that is just getting started. NBCUniversal is accused of not properly disclosing that it used credit information when making employment decisions. The named plaintiff, Eufemio Mendez, claims Universal relied on consumer reports, that included credit information, to make all kinds of adverse action decisions including termination, reduction of hours, change of position, failure to hire and failure to promote.

The crux of the issue is, once again, the lack of a stand-alone disclosure and authorization form that meets FCRA requirements. The suit also claims the company doesn’t give applicants sufficient notice and opportunity to respond before adverse action is taken.

Delaware Governor Signs Child Protection Act

The state of Delaware has long required background screening for public school teachers and full-time child care professionals, but now even part-timers, summer workers and volunteers must undergo the same scrutiny. Governor Jack Markell signed Senate Bill 144 into law. It is to be known as the “Joseph R. ‘Beau’ Biden III Child Protection Act” in honor of the Vice President’s oldest son’s memory and his dedication to Delaware’s children.

A task force did an in-depth review of the state’s background screening system and suggested changes to protect children in schools and other settings. Their main goal was to eliminate inconsistencies and make the code easier to follow. One of the recommendations was to not force smaller private schools and camps to pay for background screening if they couldn’t afford it- but if they take that exemption, they are required to tell the parents that they are not doing checks on the part-time employees and volunteers.

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