Drugstore Chain Settles Class Action Lawsuit for FCRA Violations

A popular drugstore chain recently settled a class action lawsuit about their background screening procedures. The lawsuit alleged that the company did not inform job applicants when they were rejected based on background checks. Although the company settled, they did not admit any wrongdoing.

By conducting background checks, the company excluded many applicants from consideration. According to the plaintiffs, some of these checks violated the Fair Credit Reporting Act (FCRA). The FCRA requires companies to notify job applicants if they are dismissed from consideration due to their background check reports. In this case, the company sent emails to rejected applicants that did not meet FCRA requirements.

Employers must follow specific procedures under the FCRA when they do not hire an applicant based on information found in a background check. This involves sending a pre-adverse action notice to the job applicant, which includes a copy of the consumer report used for the decision and a summary of their rights under the FCRA. The applicant must be given a reasonable amount of time to respond to this notice.

If a company decides to reject an applicant based on their background check, they must inform the individual that the information in the report influenced the decision. They should also provide the name and address of the company that provided the report and inform the applicant that they can obtain another copy of the report for free within 60 days.

In this class action lawsuit under the FCRA, individuals who applied for a job with the drugstore chain between March 30, 2020, and May 17, 2022, and were denied employment based on a background check may benefit from the settlement. Qualified individuals could receive up to $918.28, with all class members eligible for up to $100. Those who planned to dispute their background check could receive an additional $818.28 if they changed their mind after receiving the company’s email.

This lawsuit underscores the importance of companies complying with the FCRA. Working with an experienced background check company can help employers ensure they meet the necessary regulations when conducting background checks.

Remember, the information provided here is for educational and informational purposes only and should not be considered legal advice. For questions about specific practices and compliance with laws, it’s best to consult with your own legal counsel.