A class-action lawsuit against 7-11 claimed the convenience store chain did not properly disclose their intent to run background checks.
About The Lawsuit
7-Eleven was hit with a class-action lawsuit that alleged the employer failed to follow FCRA regulations during their hiring process. Specifically, the suit claimed 7-Eleven neglected to provide job seekers with compliant disclosure documents. The Fair Credit Reporting Act (FCRA) stipulates that a disclosure must be a clear, conspicuous and standalone document that informs the recipient an employer wishes to run a background check on them. It cannot contain confusing language or any additional content.
According to the suit, the disclosure 7-Eleven provided included information about state laws, details about the Consumer Reporting Agency that would perform a background investigation and a “blanket authorization allowing the disclosure of information directly to 7-Eleven.” This goes against the FCRA mandate for disclosures.
7-Eleven Agrees To A Settlement
As the case proceeded, 7-Eleven agreed to a settlement. They will pay $1,972,500 to the participants, of which there are approximately 50,000. This settlement was thought to be the best option for the company as the case appeared to show the employer was “willfully” violating the FCRA.
The Importance Of A Proper Disclosure
Every employer must follow federal laws, such as the FCRA, and applicable state laws. Not doing so can lead to lawsuits like the one against 7-Eleven. Employers who settle or are found to violate these laws may be required to pay large fines.
In recent history, we’ve seen numerous lawsuits against employers for similar violations. This can be a massive issue for large organizations. Employers are likely to follow the same procedures for hundreds or thousands of applicants. This can result in class-action lawsuits with hundreds or thousands of plaintiffs. Luckily, it’s easy for employers to remain compliant with FCRA laws.
Takeaway For Employers
Before running a background check, every employer must provide the applicants with a standalone disclosure and authorization document. Both must be concise and devoid of any additional content. Backgrounds Online provides sample forms that our clients can use and customize as needed. Learn more about disclosures.
We do not offer legal advice, but we do provide educational resources that can help during your hiring process. Visit our Education Center for more information. We also commonly recommend that every employer document their hiring and screening policies. They should be reviewed and approved by legal counsel to ensure they cover all relevant laws where you operate. Each person who is involved in hiring should have access to the final document.
When you’re ready to run background checks, the team at Backgrounds Online can help make the process smooth, transparent and fair. Our system makes it easy to fully customize screening packages for any type of position and we provide sample forms for compliance purposes. If you have questions or need assistance, please contact us. We’re available via phone, email or chat Monday through Friday from 5am to 6pm PT.