How vulnerable is your company to class action litigation?

Partnering with a reputable background screening company is an investment in your business!

Consider the following facts.

  • Negligent Hiring:
    • $1 million is the average settlement in a negligent hiring lawsuit
    • 13% of workplace fatalities in one year were the result of assaults and violent acts by an employee. (U.S. Department of Labor)
  • Fraud: According to a 2016 report by the Association of Certified Fraud Examiners:
    • 5% of a corporation’s annual revenues is lost to fraud
    • $150,000 is the median loss from a single case of occupational fraud.
    • 23% of occupational fraud cases resulted in a loss of at least $1 million
  • Fines for FCRA non-compliance:
    • $6 Million             Publix Super Markets
    • $5.7 Million         AutoZone
    • $4 Million             Dollar General
    • $3 Million             Home Depot
    • $3 Million             Red Lion

Need help designing your background screening program or do you need to “tune up” your current program? If so, click here.

Learn the differences between County Criminal, State Criminal, Federal Criminal and “National” Criminal checks by speaking with your Cisive representative today at 1-866-557-5984.

CARCO Announces its Designation of NICB Strategic Partner

CARCO, the pre-insurance vehicle inspections division of Cisive, is proud to announce its partnership with the National Insurance Crime Bureau (NICB) as a NICB Strategic Partner.  The partnership program recognizes companies that have a strong interest in working collaboratively to fight vehicle theft and insurance fraud.

CARCO has been providing pre-insurance photo inspections and fighting fraud in the auto industry since 1977. The vehicle inspection process helps prevent insurance fraud while keeping insurance premiums as low as possible for insured consumers. Insurance fraud costs the motoring public millions of dollars each year. CARCO works closely with the NICB and other law enforcement agencies to help recover and prevent tens of millions of dollars in fraudulent claims over the years.

Senior vice president, Will Pagan, stated “We are happy to have obtained this newly-created designation which reflects the many years CARCO has been working closely with the NICB. CARCO’s database is accessed more than ten thousand times per day, helping the NICB and law enforcement in reducing fraud and keeping premiums down for insureds.”

About CARCO:

CARCO, a division of Cisive, is the leading provider of vehicle pre-insurance inspection services in the U.S. Major insurance carriers choose CARCO for its extensive and convenient site network. CARCO’s advanced technology completes the process in the most efficient and effect manner while complying with regulations.

About NICB:

The NICB partners with CARCO, members, insurers and law enforcement agencies to facilitate the identification, detection and prosecution of insurance criminals.

Former Lockheed Martin Engineer Awarded $51 Million for Age Discrimination

A New Jersey jury awarded a former Lockheed Martin employee $51.4 million for age discrimination. Plaintiff’s attorney Console Mattiaci called the award “one of the largest ever obtained by an individual plaintiff in an age discrimination case.”

In 2012, citing a reduction in workforce (RIF), Lockheed Martin fired Robert Braden who was employed by the company, and its predecessors, for over 28 years. Braden sued the company for age discrimination because he was the oldest of six people in his company unit and he was the only one let go. (He was 66 while two others in his unit with the same title were ages 42 and 38.)

Braden also claimed that the company consistently practiced laying off older workers and hiring younger ones, and giving older workers lower ratings and raises because “they had nowhere else to go.” He said in his complaint that five of 110 Lockheed Martin workers in his job classification “were terminated as part of the layoffs. All five were over the age of 50.” Within a year of Braden’s termination, Lockheed Martin hired a new person in his position despite claiming that lack of work was the reason for his termination.

Lockheed Martin defended the claims citing Braden’s record of below average performance and lack of work for his skill set as the reasons for his termination. Although Lockheed Martin cited to the fact that it had a process in place to prevent age discrimination in the RIF, including an adverse impact analysis done by HR in conjunction with the company lawyers and EEO group, a company witness testified that Mr. Braden did not go through the company’s standard RIF process.

After a short four-day trial, the jury awarded Braden almost $50 million in punitive damages based on the jury’s determination that the company acted in reckless disregard for discrimination laws. Braden also received $520,000 for lost wages/benefits, and an additional $520,000 for emotional distress. The jury verdict entitles Braden to file an application seeking to have Lockheed Martin pay his attorneys’ fees.

There’s a lesson here for employers. Every company, no matter its size, must follow the civil rights law. Compliance is key!

Robert Braden v. Lockheed Martin Corporation, Civil Action No. 14-4215-RMB-JS (D.N.J. 2014).

CARCO Group Announces Corporate Rebranding, Introduces Cisive Family of Brands

CARCO Group, Inc., a leading provider of tech-enabled and compliance-driven human capital management solutions, is changing its name to Cisive to better communicate its focus on clear and accurate insights for its HR solutions, security and insurance/fraud prevention clients. As the parent company for all of its businesses, Cisive will house the CARCO and Driver IQ brands and continue its mission to help clients identify fraud and reduce risk through innovative technology.

Building on the success of its HR onboarding, background screening and investigation business, the company is rebranding to keep pace with its growth and drive innovation across the human resource capital management market. The CARCO brand will focus exclusively on pre-insurance vehicle inspections and fraud prevention.

“This is an exciting time of innovation and growth for our company. Cisive (think decisive!) stands for clear and accurate insights that give our clients confidence in their most critical decisions while protecting their brand and reputation,” said Jim Owens, CEO and President of Cisive. Owens further stated, “It has become harder and more complex to determine relevant facts in a world where instant information rules. Decision making is more important than ever, made even more challenging by an ever-growing number of sources, some credible, others not. Further, today’s businesses demand an experience best delivered by technology integrated with human insight.”

Throughout the company’s history, the world’s most prestigious organizations have turned to Cisive for the most accurate and legally compliant background screening and pre-insurance vehicle inspections. As the business environment grows ever more complex, Cisive will continue its focus on information accuracy to ensure clients receive clear and accurate insights in order to make confident business decisions.

The Cisive brand includes the following business divisions:

Cisive, the new name of the HR technology, human resource management solutions and background investigation business lines.

CARCO, the leader in the pre-insurance vehicle inspection and fraud prevention market. The CARCO name will now be focused exclusively on vehicle inspections and fraud prevention.

Driver iQ, the leader in screening for the trucking industry.

The Cisive family of brands will retain the established values and commitment to great customer service that its clients have come to know and expect over the years.

For more information, visit www.cisive.com.

About Cisive

Cisive is a leading provider of tech-enabled and compliance-driven human capital management and risk management solutions. The company’s core onboarding and pre-employment background screening offering provides clients with a high quality, regulatory compliant and tech-enabled solution. Cisive currently serves clients across the financial services, transportation and media and telecom end-markets, among others, and offers transportation clients a comprehensive, industry-focused solution through its Driver iQ branded offering. Cisive is headquartered in Holtsville, NY and has office locations in Spring Lake, NC, Tulsa, OK, and Tustin, CA.

 

Judge Rules Amazon Can’t Duck Class Action Background Check Suit

  On January 30th, A Florida federal judge denied Amazon.com’s motion to dismiss a class action by job applicants accusing the online retailer of violating the Fair Credit Reporting Act through its background check process.

Plaintiffs argued that Amazon violated the FCRA by failing to provide two separate forms for the job application and the background check authorization for employment at a Florida-based fulfillment center. It should be noted that this case is a consolidation of two separate background check litigation suits.

U.S. District Judge Lazzara agreed with the plaintiffs that the alleged failure to receive a stand-alone disclosure document is not hypothetical or uncertain, and can plausibly constitute an injury of fact. The judge found that Amazon’s actions related to the disclosure violations were willful, as a liability waiver was included with the background check policy.  He stated, “The plaintiffs have at least three kinds of harm: invasion of privacy, informational harm and risk of harm.” He added that it is possible the company did not follow the proper steps to receive approval for the checks. All of this convinced the judge that Article III standing is sufficiently established in this case.

The judge disagreed with arguments by Amazon that the applicants had no viable claim based on the Supreme Court’s decision in Spokeo v. Robins, which found that consumers must allege concrete injury instead of a technical statutory violation to establish standing.

Simply put, Plaintiffs sued alleging their background checks were unauthorized because the authorizations did not comply with the FCRA.

There’s an important lesson for employers here. Ensure your hiring process is FCRA compliant! The FCRA expressly requires employers to provide applicants with a stand-alone disclosure and authorization form prior to obtaining a background check. Unfortunately, many employers still fail to comply with this law and find themselves embroiled in costly lawsuits. This lawsuit is a reminder that employers should periodically review their hiring processes to ensure strict compliance.

To learn more about FCRA compliance, call a Cisive Specialist at 866-5575984 or click here.

Hargrett v. Amazon.com Inc.

Court Rules Using a Liability Waiver in Background Check Disclosure Forms Violates the FCRA

A subsidiary of oil field services company Schlumberger Ltd. violated the FCRA by placing a liability waiver on its job application disclosure form to force applicants to waive potential claims against the company.

On an issue of first impression, the US Court of Appeals for the Ninth Circuit said while employers must inform a job applicant that the company will perform a background check in the hiring process, the form cannot include a provision waiving the applicant’s rights to sue for any information found in the background check.

In its decision, the Ninth Circuit said the company had willfully violated the statute, opening it up to the Plaintiff’s petition for both statutory and punitive damages.

This is the first time a federal appeals court decided this issue under the FCRA, which is intended to protect employees over concerns about potential errors in consumer reports that can improperly cause applicants to lose out on jobs.

There’s an important lesson for employers here. “The court’s conclusions that an employee who wasn’t actually harmed by the form still has standing to sue and that the company can be sued for a willful violation are surprising,” said Angela Kleine, an attorney who represents financial companies in FCRA matters. The FCRA imposes statutory penalties of $100 to $1,000 per willful violation, so damages could really add up if thousands of applicants received the same form and are potential class members, she said.

This decision is another reminder that employers must review their hiring paperwork and processes to ensure compliance with the FCRA. These matters are not taken lightly by the courts. The more documentation an employer puts into the disclosure form, the greater the legal risk. A waiver is a particular hot-button item that would draw a court’s attention. The inclusion of an employer waiver of liability in a document intended to warn an applicant that background information may be sought is at odds with the statute’s protective purpose, the court said.

Syed v. M-I, LLC , 2017 BL 16499, 9th Cir., No. 14-17186, 1/20/17

CARCO Group Presents Complimentary Webinar – 2017 New Form I-9


January 27, 3:00-4:00PM EST

U.S. Citizenship and Immigration recently revised Form I-9. Is your program still compliant?

Find out by registering for this complimentary webinar, hosted by CARCO’s I-9/E-verify Product Manager, David Hair.

REGISTER NOW!

What will be covered?

David will highlight the recent changes to Form I-9, important information to stay compliant, CARCO’s I-9/E-verify solution and more!

Who should attend this webinar?

Experienced I-9 professionals and novices alike will benefit from this in depth overview.

Have a scheduling conflict?

No worries! Simply register for the event to receive an archived recording 2 business days following the event.

 

View Systems Requirement for Webinar Participation

 

Express Services Settles Background Check Class Action for $5.7M

Plaintiff Jose Flores sued Express Services alleging that they violated pre-adverse action notice to employees and job applicants, as required by the FCRA, by not affording them the opportunity to correct any inaccuracies in background checks before Express took adverse action against them. Defendants deny that their actions violated the law.

Mr. Flores and Express Services agreed to settle the claims alleged in the case to avoid the cost and risk of trial.

The Settlement Agreement provides the following benefits:

  • Defendants have changed practices to address the conduct complained of in the litigation.
  • Defendants will pay the sum of $5,750,000.00 into a Settlement Fund.

Important lesson to employers: Over the last few years, federal courts have increased scrutiny of employer compliance with the FCRA’s adverse action requirements. Employers must follow the requirements if they intend to take adverse action against a job applicant or employee BEFORE the adverse action is taken.

Simply put, if you intend to deny employment based upon the results of a background check, you must provide a pre-adverse action notice to the individual, including a copy of the consumer report. This action gives the applicant or employee an opportunity to correct any mistakes in the report and discuss it with you before the company takes adverse action. Failure to do so – now more than ever – will most likely result in a lawsuit you cannot win.

To learn more on FCRA compliance click here or contact a CARCO Specialist at 866-557-5884.

 

FINRA Fines Several Large Financial Companies $14M for Non-Compliance

finra-logoOn December 21st, the Financial Industry Regulatory Authority (FINRA) announced that it fined several large financial companies a total of $14 million for record -keeping issues that may have allowed company and customer documents to be altered.

According to FINRA, the companies failed to keep millions of electronic documents in a “write once, read many” format, which would have made it impossible to modify or destroy records once they were written.

FINRA is an independent, not-for-profit organization authorized by Congress to protect America’s investors by making sure the broker-dealer industry operates fairly and honestly. The do so by:

  • Writing and enforcing rules governing the activities of 3,869 broker-dealers with 641,133 brokers;
  • Examining firms for compliance with those rules;
  • Fostering market transparency; and
  • Educating investors.

CARCO has several products that help financial companies stay FINRA compliant, including:

  • FINRA Broker Sanctions Search Solution
  • Financial Anomalies Search Technology (FAST)
  • Federal Financial Institution Examination Council (FFIEC)
  • Self-Regulated Organizations Checks (SRO)
  • Many more

Let CARCO be your first line of defense against FINRA non-compliance.  Contact a CARCO Specialist at 1-866-557-5984 or click here to be contacted directly.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Starbucks Hit With Class Action for Violating the FCRA Relating to a Background Check

starbucks-logo-051711Jonathan Rosario claims that Starbucks Corp. denied him a job based on inaccurate results of a background check, without giving him a proper chance to correct those results. In doing so, he claims, Starbucks violated provisions of the FCRA.

In March 2016, Rosario applied for a job at Starbucks in Castle Rock, CO. The background check performed on him listed criminal felony and misdemeanor records from counties in Pennsylvania, some of which involved violent crime and drug-related charges.

Rosario claims that by the time he received the letter from Starbucks informing him that the results of his background check did not meet the company’s requirements, Starbucks had already removed him from consideration for employment.

Rosario says the criminal history that showed up in his Starbucks background check is inaccurate and false. He believes those entries resulted from identity theft, especially since he has never been to Pennsylvania.

Rosario challenged the inaccurate background check by following the dispute procedure of the consumer reporting agency that performed the background check for Starbucks. The errors were corrected, and a representative confirmed to Rosario that a corrected report had been forwarded to Starbucks.

Rosario then contacted Starbucks in an attempt to revive his job application, he says. However, the company declined to revisit its decision to deny him a job.

The law requires that before an adverse decision is made, the job applicant must get a copy of the report and be given a chance to dispute and correct its contents. By failing to give Rosario a meaningful opportunity to dispute the contents of his Starbucks background check, he claims, Starbucks violated the pre-adverse action notification requirements in the FCRA.

Rosario proposes to represent a nationwide plaintiff Class that would include U.S. persons who applied for a job at Starbucks and who were the subject of a Starbucks background check report on which the company based an adverse employment decision, but who did not receive a timely copy of that report or the FCRA summary of rights.

He seeks an award of actual, statutory and punitive damages for himself and the plaintiff Class and reimbursement of court costs and attorneys’ fees, all with pre- and post-judgment interest.

There is an interesting lesson for employers here: Employers may want to revisit their policies regarding keeping a job open while the selected candidate is disputing a background report. The FCRA does not require that jobs be kept open during a dispute. No one can predict what a judge or jury might decide, but either way it will be extremely costly for Starbucks to defend their actions. If this case is decided in plaintiff’s favor, employers will certainly want to revisit their dispute waiting policy.

CARCO can help keep you FCRA compliant. CARCO’s onboarding platform allows clients to be notified if a dispute has been opened based on the clients’ work flow and their decision on whether or not to keep the job open during the dispute.

Contact a CARCO Specialist at 1-866-557-5984 or click here for information on how CARCO’s onboarding platform can keep your company FCRA compliant!

 

Jonathan Rosario v. Starbucks Corp., Case No. 2:16-cv-01951, in the U.S. District Court for the Western District of Washington.