Former Domino’s employees have been allowed to proceed with a class action suit for potential punitive damages against the company for alleged violations of the FCRA. Domino’s had attempted to have the case dismissed, however the US District court denied that motion asserting that the plaintiffs has made a sufficient showing to move the case forward. The plaintiffs in the case allege that Domino’s systematically and willfully violated the FCRA in the following manner:
- Performing background checks on employees without proper authorization including not providing the prerequisite disclosure and authorization in a stand – alone document. They allege the disclosure that was provided was part of the employment application.
- Failure to provide copies of the background checks prior to taking adverse action the applicants.
In addition to the above case, there has been an uptick of FCRA related lawsuits and the importance of FCRA compliance can’t not be overstated or run the risk of statutory penalties for such violations. Yet many companies particularly small business are not complying with the requirements of the FCRA.
When an employer utilizes a Consumer Reporting Agency to obtain information related to the applicant’s background, the following is required:
- A clear and conspicuous disclosure stating the intent to procure a consumer report.
- Obtain authorization from the applicant in order to procure the consumer report.
- Include a Statement of Rights under the Federal Trade Commission.
- In the event the employer intends to take adverse action, based on information contained in the Consumer Report, (in part or whole) proper pre -adverse notification must be given to the applicant/employee.
- Provide the applicant/employee with adverse notice after employer has taken final adverse action.
Domino’s had sought to avoid statutory damages by asserting that its actions were not a willful violation of the FCRA. The FCRA allows a plaintiff to recover damages if it demonstrates the defendant was willful or negligent in violation of the statutory requirements.
Background Screening is essential – just as is following FCRA requirements. The easier the process, the less likely you are to be negligent. ARS helps organizations maintain the required compliance by offering an easy to use compliance manager integrated into our client’s accounts.