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Legal Alert

Large Retailer Violates FCRA

Recently Michael’s Stores, Inc. received notice of a class action lawsuit challenging its use of employment screening checks. The suit alleges that the major retailer failed to acquire proper consent and disclosure from applicants who were unaware that a criminal check was being conducted on them. This is in violation of the Fair Credit Reporting Act (FCRA) that requires employers who use a consumer reporting agency (CRA) to provide certain advance notices and receive consent from the subject of the report.

Michael’s allegedly also failed to provide applicants with an opportunity to dispute the negative information reported on them in the background screening check, otherwise known by the FCRA as the “pre-adverse/adverse action process.” The FCRA class action lawsuits seek fines, punitive damages and attorneys’ fees. As with many class action suits, the damages to any one individual may be small, but can be cumulatively significant when the full class of potential plaintiffs is included.

Employers that use consumer reporting agencies to procure employment background checks must ensure that the information being provide is in compliance with the FCRA.

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