Employers utilizing background-screening services in their hiring practice must adhere to consent and notice procedures prescribed by the Fair Credit Reporting Act (FCRA). Before an applicant may be denied employment based on the findings of a background screening the employer must provide proper notice of the intent to search and obtain a written consent by the applicant. A class action lawsuit by past applicants and employees of the Kmart Corporation alleged the company’s willful failure to comply with disclosure and authorization requirements set forth in the FCRA. A federal judge in the Eastern District of Virginia granted preliminary approval for a $3 million settlement of the action. According to the FCRA, employers who engage in background screening practices of applicants cannot act without following reasonable procedures to ensure the fair treatment of applicants seeking their employ under subsections 2 and 3 of 15 U.S.C. § 1681(b).
See Pitt v. Kmart Corp., E.D. Va., No 3:11 – cv-00697, settlement preliminarily approved 2/4/13), available at http://op.bna.com.proxy.wcl.american.edu/pl.nsf/r?Open=kjon-94pm58; 15 U.S.C. § 1681(b)(2)-(3) (2006) (limiting the types of information employers may seek from individuals and the employer’s ability to share such information with third parties).
(Development Authored by Jay Shannon)