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| Blog | Criminal Record Checks
June 28 2018

Employers Prevail in FCRA Class Actions

In Lewis v. Southwest Airlines, the plaintiff asserted classwide and "willful" violations of the Fair Credit Reporting Act's disclosure requirement and corresponding violations of California's fair credit reporting act.  The class action alleged that Defendant Southwest Airlines Co. ("Southwest") improperly procures background checks of employment applicants during its hiring process. Plaintiff Justin Lewis, a former Southwest employee, specifically alleges that Southwest procured a background check about him without doing the following: 

  1. providing him with proper notice;
  2. properly receiving his authorization
  3. informing him of his statutory rights
 
The court reasoned that the district courts have considered whether extraneous information in an FCRA disclosure constitutes a willful violation, but have provided inconsistent and even conflicting answers.
 
In Branch v. GEICO, In August 2016, Branch accepted a job offer with Defendant GEICO, contingent upon the results of a background check. The background report included a felony conviction that Branch had not disclosed on her application. GEICO preliminarily graded Branch’s report as “Fail” because of the conviction and then contacted Branch by phone. During the call, Branch explained that the conviction was a misdemeanor, not a felony. While Branch averred that GEICO had rescinded the job offer over the phone, GEICO maintained that it had advised her that she would receive a pre-adverse action letter with a copy of the background check and a summary of her rights, including instructions on how to dispute the background report. GEICO sent Branch the letter the next day, and later sent an adverse action letter, indicating that GEICO would not hire her.

GEICO did not defeat a pre-adverse action claim on summary judgement but did beat the plaintiff's motion to certify a class action. The plaintiff alleged that GEICO took an adverse action when it assigned the plaintiff's background check a preliminary grade of "Fail" - based on GEICO's "Adjudication Process."

And finally, in Culberson v. Walt Disney, the Culbersons brought a class action lawsuit against Disney under the Fair Credit Reporting Act (“FCRA”).  The suit alleges that Disney violated the FCRA by obtaining a background report without providing a proper disclosure and by taking adverse action without following a proper adverse action process
 
The court relied on the opinion in Lewis v. Southwest, holding that Disney did not act "objectively unreasonable." The law is dynamic and employers should continue to monitor case law and regularly developments.