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| Manufacturing
April 17 2018

Background check class action lawsuit - Frito-Lay to pay $2.4m

A failure to disclose to potential employees during the hiring process that consumer credit reports were being used as part of the background checks, has resulted in a large payout by Frito-Lay.

Frito-Lay Inc., a subsidiary of Pepsico Inc., has agreed to pay $2.4 million to settle a class action lawsuit alleging that the company violated the Fair Credit Reporting Act by using consumer credit reports when they conducted background checks as part of a hiring process without properly disclosing this practice to the job applicant.

Plaintiff Marcus Chism, a former Frito-Lay employee, requested preliminary approval of the settlement on Friday from a California federal judge.

This settlement will end his Frito-Lay class action lawsuit that claimed the company unlawfully failed to disclose the fact that they incorporated consumer reports into the background checks they run on job applicants.

The Frito-Lay FCRA class action lawsuit implicates Pepsico, Frito-Lay, and First Advantage Background Services Corp., the company Frito-Lay used to conduct the background checks on its employees.

The $2.4 million Frito-Lay class action settlement was reportedly reached after two mediated discussions between Chism and Frito-Lay. The two parties agreed upon a gross settlement of $62.87 per Class Member and a net settlement of at least $40. Reports show that this compensation is in line with, if not slightly higher than comparable settlements for alleged FCRA violations in the Northern District of California.