Litigation Update: Michaels Stores Hit Again for Background Checks
February 5, 2015
Michaels Stores was hit with another FCRA class action case last week. You might recall that the arts and crafts retailer was named in a similar suit just a few months ago*. The current complaint is once again about the Fair Credit Reporting Act (FCRA) disclosure requirement under 15 USC 1681b(b)(2)(a). Specifically at issue is the requirement that disclosure is made in a document that consists solely of the disclosure. The complaint alleges that in the company’s employment background screening process, the disclosure is “embedded within one long continuous web page that applicants fill out” that includes application information and a liability release.
The complaint also contains a count for failure to obtain the proper authorization to run a background check under 1681b(b)(2)(A) (ii) . And much like the other class actions in this category, the plaintiffs allege that the violations are willful and that Michael’s knowingly failed to comply. It will be interesting to see if the two cases are consolidated by the courts.
Case Name: Raini Burnside v. Michaels Stores, Inc., Case No.6:15cv3010, U.S. District Ct., Western District of Missouri
File Date: January 9, 2015
Cause of Action: Class Action, Fair Credit Reporting Act 15 USC 1681(b)(2)(a), Disclosure and Authorization
Bottom Line: Online application forms need to be reviewed and updated in light of the current focus on technical language in the statute. If your online form cannot immediately be brought into compliance, consider using a paper form(s) that have been vetted by your legal counsel.
*Graham v. Michaels Stores Inc., Case No. 2:14-cv-07563, U.S. District Court for the District of New Jersey Dec. 4, 2014
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