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Walt Disney Parks and Resorts was sued for two alleged violations of federal law. A California court ruled in favor of the employer.

About The Case

A lawsuit known as Culberson v. Walt Disney Parks and Resorts was considered at a California court. Culberson was the lead plaintiff in this class action suit. He alleged that Disney was guilty of two violations of the Fair Credit Reporting Act (FCRA).

The lawsuit asserted that Disney failed to properly inform job seekers of their intent to run background checks. It also accused the employer of not following a federally mandated adverse action process. Claims like these are common. They can be extremely costly for employers who are found to have willfully violated the FCRA.

This case was reviewed at the Los Angeles Division of the Superior Court of California. Disney was granted a summary judgment which meant the lawsuit would be dropped without the need for a trial. While this outcome was against the plaintiff, every employer should have policies in place to ensure they follow laws where they operate. This includes complying with the FCRA.

Disclosure Claim

Before running a background check, employers must provide a document that discloses their intent to do so. The person who is meant to be screened must give consent to this and an authorization form. Both must be standalone documents that do not contain any additional content. Learn more.

Culberson claimed Disney’s disclosure included unnecessary content. While this may have technically been true, the court considered whether or not it constituted a willful violation of the FCRA. They determined it did not and noted that this situation failed to demonstrate “objective unreasonableness.”

Adverse Claim

Every employer has the right to review background checks for applicants, employees, contractors and volunteers. In some cases, an organization may wish to deny employment based on something contained in that report. Before doing so, they must send the person a letter that states an adverse action is being considered, a copy of the background check and other documentation. The applicant must then have time to review this information and file a dispute if they feel something is incorrect. Until this process is complete, the employer cannot take an adverse action.

In the lawsuit against Disney, Culberson claimed the employer took adverse actions before completing this mandatory process. The suit alleged Disney has an internal status that labeled certain candidates as “No Hire.” This was said to indicate the employer made hiring decisions before job seekers were allowed to appeal.

The court disagreed. Their findings said Disney only used “No Hire” internally and that was not the same as making a final determination. Therefore, the employer was not found to have violated the adverse action process.

What Employers Should Know

Every employer should be aware that they must comply with relevant federal and state laws. Failure to do this could result in class action lawsuits, fines or other repercussions.

Backgrounds Online provides educational resources and documents that can help bolster your compliance efforts. We offer sample disclosure and authorization forms that can be customized as needed. Our site also contains sample pre-adverse and adverse notices as well as information on how to handle all these tasks properly.

If you need to run background checks for employment-related purposes, please contact us. Every member of our processing team earns their FCRA certification and stays educated on background screening laws and best practices. We are available Monday through Friday from 5am to 6pm PT.