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).

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

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.

Wegmans Hit with Class Action for FCRA Violations Related to Background Checks

wegmans_logoTwo Wegmans Food Market employees have accused the supermarket chain of violating the FCRA by inappropriately using consumer background checks to screen job applicants and not telling them first.

Plaintiffs Ashleigh Wheeler, who was hired in 2013 as a cashier, and Jerah Brewster, who was hired in 2015 by the grocer as a pharmacy technician and later worked as a coffee shop attendant, filed the proposed class action lawsuit in New York federal court.

Wheeler and Brewster say they completed Wegmans’ standard electronic documents related to their employment which included an authorization to conduct a background check and a credit check.

However, the pair contend that Wegmans’ online authorization for a background check failed to properly disclose to them that the grocery chain would obtain consumer background reports.

According to the class action, Wegmans, “acted willfully and in deliberate or reckless disregard of its obligations and the rights of plaintiffs Wheeler, Brewster and other class members without making the required disclosure.”

Additionally, under the FCRA, job applicants have a right to obtain their consumer reports and to have errors in the reports corrected. But Wegmans’ background check authorization document allegedly failed to inform job applicants of this right.

Instead, the lawsuit states that the document contained wording that released Wegmans from all liabilities related to information found in the background check.

The authorization allegedly included the following language: “I hereby release Wegmans, my former employers, and all other persons or entities contacted by Wegmans from any and all claims, demands, or liabilities arising out of or in any way related to the release, disclosure, and use of such information.”

The Plaintiffs’ allege that the inclusion of this provision in the same document as the background authorization is a direct violation of the FCRA.

The pair claim they were misled about the nature and purpose of giving consent for the consumer background check and had their privacy subsequently invaded.

They are seeking to represent a nationwide Class of all Wegmans employees and job applicants who were the subjects of consumer reports obtained by the supermarket chain over the past five years.

The lawsuit is requesting not less than $100 but not more than $1,000 in compensation for each FCRA violation as well as punitive damages.

Over and over again we hear about class action lawsuits regarding FCRA violations. The FCRA is very clear. Organizations must ensure they are in compliance or risk being sued. Partnering with a reputable background screening company is one way of ensuring compliance. Contact CARCO Group to see how we can help – 1-866-557-5984.

 

 

Wheeler, et al. v. Wegmans Food Markets Inc., Case No. 6:16-cv-06825, in the U.S. District Court for the Western District of New York.

Remember to use the new Form I-9 as of January 22, 2017

reminder-icon

The revised Form I-9 and instructions on how to use it can be found on the USCIS website.

Some notable changes:

  • It asks for “other last names used” rather than “other names used”
  • The certification process for certain foreign nationals has been streamlined
  • It has dedicated areas for adding additional information, rather than having to add it in the margins
  • Prompts have been added to help ensure information is entered correctly, and
  • Multiple preparers and translators can now be entered.

USCIS is also saying that the revised Form I-9 is easier to complete using a computer, thanks to:

  • Drop-down lists and calendars for filling in dates,
  • On-screen instructions for each field
  • Easy-to-access full instructions, and
  • An option to clear the form and start over.

To ensure I-9/E-Verify compliance, contact CARCO today 1-866-557-5984 or click here to be contacted by a CARCO Specialist.

 

 

Rite Aid Seeks Dismissal of Job Applicant Background Check Class Action

rite-aid-logoOn December 6th, Rite Aid filed a motion to dismiss a proposed FCRA class-action in the U.S. District Court for the Eastern District of Pennsylvania.

According to the complaint, Rite Aid violated the FCRA by allegedly failing to allow job applicants to challenge inaccurate or misleading reports after they were rejected for employment. The Defendant claims that the case should be dismissed because the Plaintiff, Kyra Moore, already settled claims with the background screening company.

Prior to applying for a job at Rite Aid, Moore was employed by CVS from 2006 to 2010. She signed a statement and was dismissed from her employment with CVS when a loss prevention officer confronted Moore about missing store stock.

In 2011, Moore applied for a store supervisor position at Rite Aid, which subjected her to a background screening by Lexus Nexus. Moore contends she was disqualified from employment at Rite Aid in April 2011 because of her signed statement regarding the alleged theft at CVS. However, according to Moore, a copy of that statement was not provided to her along with Rite Aid’s adverse action notice.

Rite Aid argues that in her complaint, Moore alleges that the background screening company acted as Rite Aid’s “agent” for purposes of the FCRA. Since Moore settled claims with the background screening company, any claims arising from the acts of Rite Aid’s agent, releases the company from alleged FCRA violations.

Rite Aid says Moore is now trying to “milk her claims for maximum personal benefit,” pointing to the fact that in 2013 Moore already filed two class actions and an EEOC proceeding.

 

Moore v. Rite Aid Hdqtrs Corp. et al., case number 2:13-cv-01515, in the U.S. District Court for the Eastern District of Pennsylvania.

Caterpillar Hit With Age Bias Suit Over Social Media Firing

caterpillar-logoCaterpillar Inc. is being sued for alleged unlawful discrimination based on age when it fired an over-40 employee because of her off-duty Facebook post.  The fired employee claims she was a victim of disparate treatment based on age. But Caterpillar said the employee was terminated because it feared she might be harassing a co-worker whom she commented about on Facebook.

Tammy Applebaum worked as a distribution clerk at Caterpillar’s Lafayette, IA, plant.  She alleges she was fired for writing a comment responding to a younger co-worker’s Facebook post. The younger employee was not reprimanded by Caterpillar.

According to the complaint, Natasha Burns, the younger Caterpillar employee, was dating Applebaum’s son. Burns posted a Facebook message, while at work, alluding to the fact that “all the guys wanted to take nude photos” of her. When Applebaum saw the post she posted a comment on Burns’ Facebook page, saying “you’ve been down that road before.”

About two weeks later, Caterpillar told Applebaum she was being terminated immediately because it feared she would create “a hostile working environment” for Burns, according to the complaint.

“Applebaum’s case is less about social media policies than about Caterpillar using a pretext to rid itself of a 52-year-old employee because of her age,” said Jay Meisenhelder who is representing Applebaum in this suit.

Caterpillar claimed Applebaum posed a harassment danger even though she and Burns worked in different departments and Applebaum never approached Burns or exchanged any words with her at work, the complaint said.

Meisenhelder said the company’s decision to fire Applebaum while not disciplining Burns for apparently posting on Facebook during working hours is disparate treatment that violates the Age Discrimination in Employment Act.

According to Bloomberg BNA’s interviews on the case, two attorneys who represent employers in labor and employment cases, but are not involved in this case, had the following to say:

  • John DiNome, a partner with Reed Smith in Philadelphia: Employers might have grounds to discipline or discharge an employee for comments posted online if they can link it to other conduct that might support harassment concerns. However, employers should tread carefully because workers’ off-duty social media posts can be protected activity under the National Labor Relations Act.
  • Michael C. Schmidt, a Cozen O’Connor partner in New York: Employers also need to be careful about regulating their employees’ off-duty conduct because some states, including New York, restrict employers’ actions based on workers’ lawful off-duty conduct. But the “heightened sensitivity” to potential harassment means employers must pay more attention to their employees’ online activity. Employers should at least investigate if they learn about social media posts that might be harassing to co-workers, he said. Harassment that occurs online could leave an employer just as vulnerable to claims as if it happened “in person at the water cooler,” Schmidt said.

Applebaum v. Caterpillar, Inc. , N.D. Ind., No. 16-97, complaint filed 11/25/16.