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A federal judge approved a $1.3 million class action lawsuit that claims the company violated federal and state laws for consumer reports.

Cause Of The Lawsuit

This case began when Ijeoma Esomonu applied for a job at Omnicare and was asked to authorize a background check. Employers must obtain authorization before initiating a background screening, but Omnicare allegedly included a liability waiver on their form. While such clauses may be common, they cannot legally be included on a background check authorization document.

Esomonu initiated a lawsuit that claimed Omnicare was not compliant with the Fair Credit Reporting Act (FCRA) and that the employer violated California’s Investigative Consumer Reporting Agencies Act. Additional plaintiffs joined until around 50,000 people were involved in the class action suit.

Compensation Requested

In 2017 both parties agreed to a proposed settlement. It was, however, rejected by a judge who felt the payout amount was too high. Esomonu and Omnicare continued the negotiation process and agreed to the $1.3 million figure.

U.S. District Judge Haywood S. Gilliam Jr. approved the revised proposal. He felt the plaintiff’s claims had sufficient commonality and that Esomonu was suited to represent the group. The judge stated that the payment amount is reasonable based on the time spent on negotiations and the risks involved with continued litigation. Based on the total, each participant is expected to receive around $16.50 in compensation.

Background Check Authorization Forms

Before running a background check on an applicant, contractor, employee or anyone else, an employer must have a permissible purpose and written authorization from the subject. This authorization request form must be a standalone document. Including any extra content is a violation of the FCRA and can lead the serious repercussions such as a class action lawsuit.

To help our clients with their compliance efforts, Backgrounds Online provides a packet that includes a sample standalone authorization document. To review and download a copy, login to your account and visit our Resource Center.

Takeaway For Employers

Every employer is responsible for complying with the FCRA, guidelines established by the Equal Employment Opportunity Commission and federal or state laws that are in place where they operate. Keeping up with all these can be difficult, but the highly experienced team at Backgrounds Online acts as your partner throughout the background screening process.

We strive to keep up with current, new and changing laws so we can provide educational resources, compliant background screening forms and other essential assets. If you have questions about how we can help with your background screening efforts, please contact us today.