On January 28th, Michaels Stores, Inc. was named in a putative class action lawsuit alleging the clothing retailer violated the Fair Credit reporting Act (FCRA) by failing to provide adequate notice of its use of background checks for prospective employees. This is the second FCRA-related lawsuit against Michaels this month (Jan. 9, 2015).
According to the complaint, plaintiff applied for a position with Michaels and argues that the retailer failed to adequately notify the plaintiff that the company would procure a credit report on her. The FCRA requires that companies make this disclosure “clear and conspicuous.”
“Defendant’s FCRA disclosure and authorization are embedded within an online employment application which appears as one long continuous Web page that applicants fill out, and which contains a liability release, among reams of other extraneous information,” the complaint says. “For these reasons, among others, defendant’s disclosure form violates the law.”
The plaintiff seeks to represent a class of individuals who have applied for a job with Michaels during the previous two years.
Castro v. Michaels Stores Inc., No. 3:15 -cv-00276 (N.D. Tex., Jan. 28, 2015)
Career Builder recently released a U.S. Job Forecast survey report indicating that things are looking good for job seekers in 2015. According to the 2,192 hiring managers who were surveyed:
- 36% of employers plan to increase full-time, permanent workers (up 12% over last year)
- 46% of employers plan to increase the hiring of temporary or contract workers (up 4% over last year)
- 45% of employers expect to raise the minimum wage
- 23% of employers expect to increase the hiring of part-time workers (up 6% over last year)
Hot areas for hiring include science, technology, engineering and math with 31% of hiring managers planning to create jobs in these areas.
Positions tied to revenue growth, innovation and customer loyalty will dominate in terms of new opportunities. The top five areas for hiring are:
- 36% Sales
- 33% Customer Service
- 26% Information Technology
- 26% Production
- 22% Administrative
Greater employment demand will help boost compensation. However, education requirements will be stricter as roles within organizations become more complex and data-driven.
All of this is good news for people who have been out of work and employed people who are interested in finding a new job.
What this means for employers is that there will be a glut of resumes coming their way for these jobs. In order to find the best person for each open position, hiring managers must vet each candidate carefully with a thorough background check. Therefore, it is important that their hiring practices and processes are up to date and compliant. There has been a surge in class action lawsuits against companies for FCRA violations. The FTC and the EEOC are watching!
Paramount Pictures is the latest employer to be accused of violating the Fair Credit Reporting Act by obtaining credit reports during the background screening process from current and prospective employees without adequate disclosure.
The Plaintiff, Michael Peikoff, accused Paramount of having a standard practice of obtaining the reports for employment purposes, but not including a disclosure that it would be procuring the consumer reports “in a document that consists solely of the disclosure,” as required by the FCRA. The complaint states that Peikoff applied for a job at the studio in 2011 and only learned in the last couple of years that Paramount “procured and/or caused to be procured a consumer report” on him for employment purposes.
The class membership is estimated at over 500 and they are looking for statutory damages from $100 to $1,000 for each violation of the FCRA plus punitive damages and legal fees. This could be a costly mistake for Paramount.
Moral of this story? Employers must ensure that their hiring processes and procedures are compliant with the Fair Credit Reporting Act or there will be a price to pay.
CARCO’s new Vendor Screening White Paper explores the importance of contractor and vendor employee screening. Created in response to a growing trend by companies to employ contractors and vendors in key roles, along with the need to justify the expense to upper management, the White Paper reviews the benefits and best practices of contractor and vendor employee screening. The paper also discusses the risks associated with not screening these workers, addresses some of the traps and dangerous practices that can ensnare the well-intentioned professional, and outlines the elements of a strong vendor employee screening program.
For a complimentary copy of CARCO’s Vendor Screening White Paper, visit: http://www.carcogroup.com/white-papers.php.