Litigation Update: Pizza Hut Hit With FCRA Class Action
January 27, 2015
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 Alberto 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
Rivera Alberto, a job applicant at a Bronx location, claims that Pizza Hut inserted a release of liability into the disclosure form, which is not allowed. In addition to the black letter of the law, the plaintiff also cites the FTC—specifically an opinion letter (the “Haynes” letter of June 12, 1998) which states that the inclusion of a liability waiver violates the sole document requirement.
The complaint also alleges a number of other problems, namely that the form is found at the bottom of the job application, it contains an authorization, it requires a certification as to policies and manuals, and has a statement of employment at-will. It makes no mention of consumer reports. The disclosure appears to be wedged into a one inch text block at the bottom of a Document titled “Employment Application” in 8 point type. I think the font size might actually be age discrimination.
The suit is seeking statutory damages of $100-$1,000 per violation, reasonable costs, attorney’s fees, an injunction, and a declaration that the Defendant’s conduct is unlawful. It is targeting Pizza Hut’s 6,000 restaurants in the United States and identifies the class as all people who applied for employment with Pizza Hut on or after January 13, 2013.
Employers, it’s time to review your forms. 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.
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