Litigation Update: Alliance Hospitality Management Faced with Lawsuit
February 2, 2015
This Post was Updated on February 9, 2015
Alliance Hospitality Management is the newest company to face litigation for its background screening practices. The hospitality management company is facing a Fair Credit Reporting Act (FCRA) lawsuit filed last week in the Western District of Wisconsin. A class action complaint was filed on January 30, 2015, alleging that the company violated portions of the Fair Credit Reporting Act in its employment background screening process. The target was again, the portion of the FCRA that requires a “clear and conspicuous disclosure” about the background check that is made in writing “made before the report is procured or caused to be procured.” A representative of the company has stated that the allegations are false and that a separate disclosure was, in fact, obtained.
Case Name: Cory Groshek v. Alliance Hospitality Management, LLC, Case No. 15-cv-65, U.S. District Ct. for Western District of Wisconsin.
File Date: January 30, 2015
Cause of Action: Class Action, Fair Credit Reporting Act 15 § U.S.C. 1681, Disclosure
According to the complaint, Cory Groshek applied for a job on or before August 8, 2012, claiming he received a conditional offer of employment on that date. According to Alliance, the conditional offer of employment was from BPJ Management Inc., and not Alliance Hospitality Management. The complaint takes issue with a disclosure with the heading “Candidate Release Authorization.” It also alleges extraneous information in the document, including, but not limited to, the waiver of liability on the same page as the Candidate Release Authorization.
Alliance maintains that the “The Candidate Release Authorization” was for public records, but not for the actual consumer report. According to the company, authorization to access consumer reports was “soley” disclosed in a separate document as required by FCRA. The company uses a professional CRA for its background screening.
The suit is seeking statutory damages of not less than $100 and not more than $1,000 for each violation.
It’s telling to note that the named plaintiff in this case has recently filed a similar class action against Time Warner. It is clear that class action law firms are capitalizing on the technical requirements of the FCRA and are targeting large employers. It’s become a race to the courthouse to file as many of these class action suits as possible. The pattern in these cases is to shoot first and sort out the facts later.
Employers, it’s a good idea to review your forms. Dig out those forms, and review them for clarity. Make sure the disclosure stands on its own, and make sure they contain no disclaimers or extraneous information. For more information on how to avoid being the next target, click here to see my latest post with an FCRA round-up and tips on how to avoid being the next member of the FCRA Class Action Club. As always, consult with your legal counsel and a background screening professional.
Latest posts by Angela Preston (see all)
- Federal Ban the Box Bill Introduced in Both Houses of Congress - October 12, 2015
- New York, New York Part II: The Stop Credit Discrimination in Employment Act - October 6, 2015
- NY, NY: If You Can Hire There, You Can Hire Anywhere (Part I, The Fair Chance Act) - October 5, 2015