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Pizza Hut Logo

Litigation Update

Pizza Hut is the latest restaurant in the hot seat. The much loved pizza chain is facing an Fair Credit Reporting Act (FCRA) lawsuit filed last week in the Southern District of New York. A class action complaint was filed on January 15, 2015, alleging that the company violated portions of the Fair Credit Reporting Act in its employment background screening process. The target was once again, the portion of the FCRA that requires a “clear and conspicuous disclosure” about the background check that is made in writing “in a document that consists solely of the disclosure.”

Case Name: Rivera v. Pizza Hut of America, Case No. 15CV00308, U.S. District Ct. for the Southern District of N.Y.

File Date: January 15, 2015

Cause of Action: Class Action, Fair Credit Reporting Act 15 USC 1681(b)(2)(a), Disclosure and Authorization

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FCRA Litigation

As we kick off a new year, at least one of the trends identified in 2014 continues to gather steam. The flood of FCRA class action lawsuits shows no signs of slowing down. As I’ve reported in the past, the hits just keep coming.

Here’s the Roundup:

Graham v. Michaels Stores Inc., Case No. 2:14-cv-07563, U.S. District Court for the District of New Jersey Dec. 4, 2014: The complaint alleges that the craft store chain violated both the New Jersey Fair Credit Reporting Act (NJFCRA) and the Fair Credit Reporting Act (FCRA). According to Graham, the company violated the requirement of providing a stand-alone disclosure. According to the complaint, the disclosure was part of the application form, included a space to list prior employers, and contained ten different state notices. The two classes identified in the pleading include all those who applied to Michaels through the online job portal in the two years prior to the suit, and all New Jersey applicants who applied in a six year window prior to the suit. [...]

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Employment Background Checks and Hiring

I almost can’t believe it myself, but it’s already December. And this point in the year means it’s almost time to close the books on 2014. As the year comes to an end, I’ve spent some time looking back at the legal trends in hiring and employment screening throughout 2014. Here is a list of the top five background screening and employment issues from 2014 that are worth reflecting on as we get ready to raise a glass to ring in the New Year.

1. An Uptick in Job Growth

Let’s start with the good news. Hiring is up. Job growth for 2014 is ending on a strong note, and the government’s November jobs report was good. And I mean really good. The US economy had the biggest gain last month since January 2012, adding 321,000 jobs. Unemployment clocked in fairly low, at 5.8 percent. It all adds up to a report card in the A range, when all that was expected was a C or maybe a C+. November set a new record as the 50th consecutive month of job gains. As business analyst Jill Schlesinger put it, “2014 has become the best year for job creation since 1999!” (Cue the Prince music, please.)” That’s welcome news for job seekers and businesses.

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Congressional Committee Report

On November 24, 2014, Senator Lamar Alexander (R-TN) and the U.S. Senate Committee on Health, Education, Labor and Pensions (H.E.L.P.) issued a scathing report, taking the Equal Employment Opportunities Commission (EEOC) to task for a laundry list of egregious tactics. The report’s title sums it up nicely: EEOC: An Agency on the Wrong Track? Litigation Failures, Misfocused Priorities, and Lack of Transparency Raise Concerns about Important Anti-Discrimination Agency

The Report

The Senate H.E.L.P. Committee Report doesn’t pull any punches. Inside are key findings of questionable practices and litigation failures by the EEOC. The report criticizes the agency’s sketchy litigation tactics, its practice of filing suit without a commission vote, questionable discovery requests, the lack of cooperation with defense counsel and a failure to conciliate. It points out that the EEOC has been ordered to pay sanctions and attorney’s fees ten times since 2011, and it has been “openly chastised” by the courts. The report also slams the EEOC for a lack of transparency, citing the dearth of reports from the General Counsel’s office, the practice of introducing guidance without public comment, and failure to respond to F.O.I.A. requests.

The report includes a chart listing the ten cases where the EEOC has been ordered to pay sanctions over the past four years. The list includes the Peoplemark case, which involved disparate impact claims based on the company’s background screening policies.

To sum it up, the report asserts that the EEOC’s tactics are ineffective, burdensome, and are costing taxpayers too much money.

A few of the specific complaints contained in the executive summary of the publication are as follows: [...]

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FTC EEOC Guide

If there’s one part of the hiring process when the candidate experience can blow up, it’s the background check. The idea of a background check is daunting for most people—even those with a clean record. If a candidate is rejected as a result of something in the background check, it is increasingly common to hear from their legal representative. One way employers can avoid problems in the background screening process is to educate job applicants. As the old saying goes, an ounce of prevention is worth a pound of cure. [...]

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Uber Background Checks

Uber can’t seem to get it right. First, the company was criticized for NOT doing background checks, and now it’s under attack for doing them the wrong way. The national ride sharing service that everyone loves to hate is back in the headlines (although I’m not sure they ever left) facing a class action lawsuit for alleged violations of the Fair Credit Reporting Act (FCRA). The case, Mohamed v. Uber Technologies Inc et al.[1] asserts that Uber violated the FCRA by failing to provide Mohamed and other drivers with a copy of their background check (as required). This case is just one more instance in a parade of many questioning the company’s practices. [...]

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FCRA Sues LinkedIn

Have you ever used LinkedIn to check up on someone? An employee or a prospective new hire? Of course you have–who hasn’t? And while I’ve never actually given the “recommendations” on LinkedIn much weight, I’ve often wondered whether employers actually rely on them to make a hiring decision. Social media sites have given us a whole new window through which to view candidates—both professionally and personally. [...]

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FCRA Background Check Settlement

This is a great time of year for most retailers. The holidays are just ahead, and consumer confidence is high. That’s the good news. Here’s the bad news: the trend of retailers being hit with FCRA class action cases continues to grow. As a colleague of mine, Scott Paler said recently, you can’t drive down the street in suburban American without noting the businesses in your shopping plaza that have been hit: Home Depot, Aaron’s Furniture, Whole Foods, CVS, Panera, Nine West, A.M.C., and so on. [...]

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Holiday hiring_2

Thanksgiving is just a few weeks away, and that means Black Friday, shopping online, and holiday music overload as we get ready for the big gift-giving season. It’s hard to believe, but holiday hiring season is already well under way. If you hire holiday or other temporary workers, it’s important to hire ones that you can trust. [...]

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AutoZone

Memphis-based AutoZone Inc. (NYSE: AZO) is the latest company to be reluctantly inducted into the FCRA class action club. The company was hit with a suit for alleged violations of state and federal law in its background screening process. The case, Aceves et al. v. AutoZone Inc, filed on September 30, 2014 in the Central District of California, claims that the retailer violated the Fair Credit Reporting Act (FCRA), California’s Consumer Credit Reporting Agencies Act (CCRAA) and the Investigative Consumer Reporting Agency Act (ICRAA). [...]

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