According to Law360, Home Depot has been sued in a Georgia federal court in a putative class action alleging violations of the Fair Credit Reporting Act (FCRA) for improperly using consumer reports and background checks. Law360 reports (subscription required) that the suit alleges that the retailer uses consumer reporting information to make employment decisions on applicants and employees without properly disclosing that it will obtain consumer reporting information and without providing copies of the reports before taking adverse action against the applicants and employees in violation of the FCRA.
As I wrote almost five years ago, employers should strictly comply with the provisions of the FCRA when using consumer reporting information to make employment decisions. Those provisions can be generally summarized as:
- Disclose, in writing, your intent to obtain consumer reporting information before requesting the information;
- Obtain written authorization to obtain the consumer reporting information before requesting the report;
- Prior to taking an adverse employment action, provide the applicant/employee with pre-adverse action notification containing a copy of the report and a summary of rights under the consumer reporting act;
- After taking the adverse employment action, provide the applicant/employee with post-adverse action notification that contains the name and contact information of the consumer reporting agency (CRA) that prepared the report; a statement that the CRA did not make the decision and advising the individual of his or her right to dispute the information in the report with the CRA within 60 days.
Failure to follow these basic steps can result in suits by individual appliants and employees, or as desmonstrated by the suit against Home Depot, even class actions.
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