Background Check Lawsuits on the Rise—Do You Have a Claim?

Unemployment is down and the job market is up, giving more opportunities to Minnesota applicants in the hiring process. For some, background checks can make the application process more challenging, especially if there are known issues related to a criminal history or bad credit. Fortunately, applicants do have rights when it comes to background checks and employment, and an increasing number of employers are failing to comply with federal background checking laws.

Unemployment is down and the job market is up, giving more opportunities to Minnesota applicants in the hiring process. For some, background checks can make the application process more challenging, especially if there are known issues related to a criminal history or bad credit. Fortunately, applicants do have rights when it comes to background checks and employment, and an increasing number of employers are failing to comply with federal background checking laws. Employer violations have led to widespread investigations, class action lawsuits, and significant recovery for plaintiffs.

The Fair Credit Reporting Act (“FCRA”) has specific rules that employers must follow if they choose to perform a background check on an employee. The law was enacted to protect the privacy of employees while also ensuring that they have a fair opportunity to correct any mistakes that may show up in the background checking process. Under federal law, employers must take the following action when performing a background check:

• Employees must be notified of intent to background check and give a signed consent. The authorization must be obtained in a manner that is “clear and conspicuous,” standing separately from other areas of the job application. Employers have been held liable for burying this authorization in a general consent form.
• Employers must notify the candidate if they are planning not to hire as a result of a background check. This is intended to give the applicant an opportunity to fix any errors in a consumer report before they are officially denied a position.
• Employees must be given time to correct any mistakes on a background report and employers must be forthright about not hiring because of a background check.

The majority of mistakes made by employers are related to failure to get consent, and failure to follow the FCRA requirements for notification. According to a recent Forbes’ report, even popular and common employers like Whole Foods, Dollar General, and Publix Super Markets have become targets of lawsuits because they have committed thousands of offenses in the application process. For employees who have been denied employment because of a background check, the FCRA gives them leverage.

The companies who perform background checks also make mistakes, and the FCRA provides remedies. Common errors on a background check include:

• Mismatching the subject of a background check with another person.
• Reporting sealed or expunged information.
• Omitting information about how a criminal matter was disposed or resolved.
• Mischaracterizing the serious of a criminal offense reported (e.g. reporting a misdemeanor as a felony).
• Misreporting criminal sentencing information.
• Reporting arrests or criminal charges that did not result in a conviction that are more than seven years old.

More information about background checks can be found on our website here.

If you have been denied employment because of a background check, or you have recently noticed that an employer ran your credit report or conducted a criminal background report without your consent, you may have a cause of action. Our Minneapolis employment lawyers are interested in hearing from you regarding the details of your application and possible FCRA violation. We will take the time to review the facts of your case, determine the proper course of legal action and pursue just compensation on your behalf. At Wanta Thome PLC, we are experienced in protecting employee rights. For more information about FCRA laws and applicant class actions, please call (612) 252-3570.