Drugstore Chain Settles Class Action Lawsuit for FCRA Violations

A major drugstore chain has recently settled a class action lawsuit related to their background screening practices. The lawsuit claimed that the company failed to properly inform job applicants that they were rejected based on background checks. It’s important to note that even though they settled, the company did not admit any wrongdoing.

The plaintiffs alleged that some of the background checks conducted by the company violated the Fair Credit Reporting Act (FCRA). This act requires employers to notify job applicants if they are being dismissed from consideration due to information found in a background check report. In this case, the company sent emails to rejected applicants that did not meet FCRA requirements.

Under the FCRA, if a company rejects an applicant based on their background check, they must provide a pre-adverse action notice. This notice should include a copy of the consumer report that was used to make the decision, a summary of the applicant’s rights under the FCRA, and a reasonable amount of time for the applicant to respond.

In the case of this lawsuit, which involved a large group of people suing the company collectively, the settlement will benefit individuals who applied for jobs at the drug store chain between March 30, 2020, and May 17, 2022, and were denied employment based on a background check. Qualified individuals could receive up to $918.28, with all class members potentially receiving up to $100. Those who initially planned to dispute their background check but changed their minds after receiving the company’s email could receive an additional $818.28.

This settlement highlights the importance of companies complying with the FCRA when conducting background checks. One way for companies to ensure compliance with the FCRA and other regulations regarding background checks is by partnering with an experienced background check company. If you want to learn more about background screening services, feel free to reach out for a conversation.