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

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.

Judge Dismisses Petco’s Motion to Dismiss Class Action for Violating the FCRA

petco-logo On November 22nd, a California federal court rejected Petco’s motion to dismiss a class-action suit that accuses Petco of not disclosing plans to conduct background checks on potential employees.

According to the court, the Plaintiffs suffered sufficient concrete injury for the case to continue. The Plaintiffs allege that Petco knew it was violating the FCRA when it buried information in pages of paperwork, instead of providing a separate document disclosing the background check.

According to the lawsuit, the FCRA requires that “an employer may not procure a consumer report concerning a job applicant or employee unless a ‘clear and conspicuous’ disclosure is made in a stand-alone document that ‘consists solely of the disclosure’ informing the applicant or employee that a report may be obtained for employment purposes.”

The complaint alleges that instead of a “clear and conspicuous” and separate disclosure, Petco has a text box in the middle of its online application “which appears on a screen with small font wording in the middle that the applicant scrolls through by dragging a scrollbar on the right hand side” called the Background Check Disclosure.

The class action states that if printed out, the disclosure would take up five pages, and which supposedly authorized Petco to conduct regular consumer reports of its applicants and employees. This disclosure does not meet federal requirements, the class action asserts.

In addition, the lawsuit claims that if an employer makes an “adverse decision” based on something in a credit report, they have to notify the consumer of that fact. The complaint alleges that Petco fails to do this.


Feist et al. v. Petco Animal Supplies Inc. et al., case number 3:16-cv-01369, in the U.S. District Court for the Southern District of California


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Judge Dismisses Lyft FCRA Lawsuit

lyft-logo   On October 5th, a California federal judge dismissed a proposed class action against Lyft, Inc. for allegedly violating the FCRA. The Plaintiff accused the company of failing to provide him a disclosure of his rights when conducting a pre-employment background check.

Plaintiff Nokchan applied to become a Lyft driver at which time Lyft ran a credit check as part of its background screening process. Nokchan alleged that Lyft’s FCRA disclosures were not presented as stand-alone documents as required by law.

The judge ruled that the Plaintiff failed to establish Article III’s injury-in-fact requirement, citing the Spokeo Supreme Court decision. The judge wrote that, “Plaintiff does not allege that as a result of Lyft‘s failure to provide the disclosures in a separate document or to notify him of his right to receive a summary of his legal rights he was confused about his rights or that he would not have consented to the background checks had he understood his rights.”

The judge previously alluded that he would dismiss the case unless the Plaintiff could sufficiently tie his injuries to Lyft’s failure to provide a disclosure, calling the current case a “naked procedural violation.” According to the judge, “Rather, based on the allegations in the complaint, Plaintiff was hired by Lyft after he successfully completed its background investigation and he continues to work for Lyft. Under these circumstances, the Court can find no real harm, or a threat of such harm, that gives Plaintiff standing under Article III to pursue his claims in federal court.”


Nokchan v. Lyft, Inc., case number 3:15-cv-03008, in the U.S. District Court for the Northern District of California.

Class Action Lawsuit Says Petco Hid Credit Check Authorizations

petco-logo On August 29th, Plaintiffs accusing Petco of violating the  FCRA urged a California federal judge not to dismiss their proposed class action lawsuit. The Plaintiffs accuse Petco of conducting credit checks and other consumer reports on applicants and hiding its employment background check disclosure on a form that included other distracting language. The complaint argues that Petco’s hidden authorization language violates the FCRA.

The complaint alleges that instead of a “clear and conspicuous” and separate disclosure, Petco has a text box in the middle of its online application “which appears on a screen with small·font wording in the middle that the applicant scrolls through by dragging a scrollbar on the right hand side” called the Background Check Disclosure.

The class action states that if printed out, the disclosure would take up five pages, and  supposedly authorized Petco to conduct regular consumer reports of its applicants and employees. This disclosure does not meet federal requirements, the class action asserts.

In addition, the lawsuit claims that if an employer makes an “adverse decision” based on something in a credit report, they have to notify the consumer of that fact. The complaint alleges that Petco fails to do this.

Plaintiff Jacklyn Feist states that in October of 2015 she applied online to work at a Petco store, had two interviews, and was given a job. However, in the meantime Petco obtained a consumer report from Petco’s vendor which stated that she “did not meet company standards.”

Feist claims that when she reported for her first day of work, she was told there was a problem with her background check and she was not allowed to work. Feist asserts that she was never provided notice about the background check or the adverse decision from it, as required by the FRCA.

Plaintiff Angelica Zimmer says that she completed the online application for Petco in July of 2014, and worked for Petco from September 2014 to January of 2015. Zimmer claims that in August of 2014 Petco received a consumer report on her from its vendor without her knowledge.

Petco previously argued that the Plaintiffs lacked standing and failed to allege an actual violation of the FCRA. The Plaintiffs rejected Petco’s arguments, claiming that the company’s disclosure was over 30 paragraphs and consisted of “reams of extraneous information beyond the required consumer report disclosure.” The Plaintiffs also argued that, “It is self-evident that such a document does not consist ‘solely’ of the disclosure that a consumer report may be procured and thus violates the FCRA.” The Plaintiffs also argued that Petco’s attempts to dismiss the case for lack of standing only applied to one of the Plaintiffs, claiming that, “The Supreme Court has repeatedly held that where the standing of one Plaintiff is established, it is not necessary to inquire as to the standing of the other Plaintiffs.”


Feist et al. v. Petco Animal Supplies Inc. et al., case number 3:16-cv-01369 , in the U.S. District Court for the Southern District of California


FCRA Class Action Suit Against Target Corp. Dismissed

target-logoOn May 12th, Judge Donovan W. Frank dismissed with prejudice a putative class action lawsuit against Target Corp. (Target) saying any alleged violation wasn’t willful.

The suit accused the company of violating the Fair Credit Reporting Act (FCRA) and focused on the requirement in the FCRA that the disclosure to an employee advising them of a background check “consist solely of that disclosure and authorization.” The plaintiff alleged that Target’s background check authorization contained extraneous language on its form, including language stating that the company has “the right to end your employment at any time for any reason.” The class action sought to include all individuals that Target requested background reports on over the last five years.

Target’s background check disclosure and authorization notice also included language requiring its employees commit to “dedication, trust and above all, honesty.” Target argued in its motion to dismiss that “any additional details merely enhanced the disclosure in a clear and conspicuous way.” Target also maintained that it is not “objectively unreasonable” that its reading of the statute could allow for additional information to be included on the background check disclosure. Judge Frank agreed with Target’s arguments, finding that the company “didn’t willfully fail to comply with the FCRA based on its objective reading of the statute.”


The case is: Thomas J. Just v. Target Corp.,case number 0:15-cv-04117, in the U.S. District Court for the District of Minnesota


Court Dismisses Dave & Buster’s FCRA Background Check Suit


On March 29th, U.S. District Court Judge Roy B. Dalton, Jr. dismissed a proposed class action against Dave & Buster’s, Inc. for allegedly violating the Fair Credit Reporting Act (FCRA).  According to the original complaint filed earlier this year, Dave & Buster’s rescinded the plaintiff’s offer of employment based on the outcome of a background check conducted by a consumer reporting agency.  However, the plaintiff contends that Dave & Buster’s violated the FCRA by failing to provide him with a copy of the report that was the basis of the adverse decision, as well as the opportunity to dispute the report’s findings.  He also claimed that Dave & Buster’s regularly used background checks on prospective and existing employees as guidelines for taking adverse employment actions such as termination, reduction of hours, change in position, failure to hire or failure to promote, the documents said.

“This practice violates one of the most fundamental protections afforded to employees under the FCRA, and also runs counter to long-standing regulatory guidance,” the complaint said.

Dave & Buster’s argued that the plaintiff lacked standing because the company never obtained or used a consumer report in its decision not to hire him. In the response to the judge’s approval of the joint stipulation for dismissal, counsel for Dave & Buster’s stated that “there was simply no merit to the case. Dave & Buster’s complies completely with the Fair Credit Reporting Act in all aspects.”



Alvarez v. Dave & Buster’s Inc., case number 6:16-cv-00252, in the U.S. District Court for the Middle District of Florida.


A Positive Employee Experience Starts with an Efficient Onboarding Process

iStock_000017261466Large Onboarding Sell Sheet  Good news! You’ve found the right candidate who accepted your offer letter!  Now it’s time to onboard that person in a positive way which may  help set the tone for his or her entire experience at your company.  First Impressions Count!  

Did you know that the average company is losing 1 in 6 of their new hires each month within three months of hire?  The average cost to replace an employee can run as much as two times the annual salary. Let’s not forget the effect on morale and productivity, as well as lost insider knowledge.

Onboarding is the best way to begin positive new employee engagement and boost overall retention rates.   

The Aberdeen Group reported that 66 percent of companies with onboarding programs claimed a higher rate of successful assimilation of new hires into company culture, 62 percent had higher time-to-productivity ratios, and 54 percent reported higher employee engagement.    

Most companies start the onboarding process before the new employee begins employment.  Rather than having a stack of papers waiting for review and signature, an efficient onboarding system provides a portal that the new employee can access from his or her home computer or mobile device to complete the process before starting with the company. 

An effective onboarding system is one that is designed specifically to make your new hire process easy and streamlined by eliminating manual, paper-based processes in favor of a proactive task oriented, self-service solution!

Imagine your new hire forms (including offer letter, employment screening FCRA consent form, background check processing and reports, welcome letter, training schedule, etc.) are stored in one place for easy access.

Then imagine the benefits to your new hire of an automated, mobile friendly, easy to use onboarding system that engages with proactive tasks and reduces the amount of time the candidate spends in the process.    

To see how CARCO’s Onboarding Solution can help your company ensure that each onboarding experience is a positive one and to see a demo of our software, click here or call a CARCO Specialist at 866-557-5984.