Tuesday, February 25, 2014

Litigation Brought Against Whole Foods for FCRA Violations

                  

On February 7, 2014, litigation was brought against Whole Foods for the use of invalid authorization forms in the background screening process. The lawsuit claims the “defendant obtained consumer reports on the plaintiff and similarly situated persons without having obtained factually valid FCRA authorization forms”. 

The online application process included a form labeled “Consent”. Whole Foods allegedly had a section in this form that states “I hereby release the company, my former employers and all other persons, corporations, partnerships and associations from any and all claims, demands or liabilities arising out of or in any way related to such investigation or disclosure.” The form also included other paragraphs that should not be part of a consent form. 

The plaintiff claims that a valid consent form was used, but not until after Whole Foods had already implemented a background check.

The invalid consent forms were allegedly used on thousands of applicants. Should this class action suit be successful, Whole Foods may be paying upwards of $1000 to each class member for the violation. 

FCRA Violations:

1) A consent form, which informs the consumer that a background check may be obtained as a condition of employment, must be signed by the applicant. The consent form, which consists of the required disclosures and requested authorization, cannot include any extraneous information. Including a section in the form about the releasing of liability for companies receiving or providing information for the background check is definitely not legal.

2) When the plaintiff allegedly received the valid consent form is also an FCRA violation. An applicant must sign a valid consent form BEFORE the background check is run, NOT after

$1000 per applicant is not something many companies can afford. Precaution should be taken to insure the consent form utilized does not include anything other than the disclosures and requested authorization. Also, get authorization BEFORE you run the background check on the applicant. As always, you should discuss this topic with your in house counsel.

If you have any comments or questions about FCRA compliance, please let us know.