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A recent lawsuit claims that UPS denied employment based on the results of a background check without allowing the applicant to review his report.

The Fair Credit Reporting Act (FCRA) states that applicants must be made aware that an adverse action is being considered. They must be also be allowed to see their background check and dispute the results if necessary.

Basis of the Lawsuit

A man who applied at UPS and was denied employment says the company violated his FCRA rights. According to his complaint, he received a tentative job offer but it was unexpectedly revoked. This occurred after the employer reviewed the results of a background check that was run by a third-party screener.

Businesses run background checks to review their applicants' backgrounds and make final hiring decisions. This is a standard part of the hiring process. However, in this case UPS is accused of not notifying the applicant that they might rescind an offer based on something in the applicant's background report.

Why Employers Must Allow Applicants to Review Their Reports

The FCRA was created to protect consumers and ensure that employers, credit providers and other entities do not make decisions about individuals based on incorrect information. While the FCRA does allow businesses to deny employment for a variety of reasons, it also stipulates the consumers must be allowed to review their reports before an adverse action, such as denial of employment, occurs.

Per the FCRA, consumers must have a reasonable amount of time to inspect their background report and given the opportunity to file a dispute. This might be necessary if a report contains information about the wrong individual or if it displays information that should not be included, such as a criminal record that was expunged.

According to the lawsuit: "It was unlawful for defendant to terminate plaintiff's employment or deny plaintiff employment on the basis of information contained in a consumer report, without first providing plaintiff with a copy of the report, notifying plaintiff of his rights under the FCRA, and giving plaintiff a reasonable opportunity to respond."

What This Could Mean for UPS

If it can be shown that the applicant did not have a chance to review his background check before the job offer was revoked, the lawsuit is likely to advance. To make matters worse for UPS, more plaintiffs could get involved. Not only is the applicant seeking damages for himself, he is also pursuing a class action lawsuit. Anyone who went through a similar situation with UPS during the last five years would be eligible to participate.

The applicant is asking for statutory damages between $100 and $1,000 for every FCRA violation. He also seeks punitive damages and relevant attorney's fees. If others join this lawsuit, they will seek similar compensation. This case, John Riley et al. v. United Parcel Service of America Inc., was filed in the U.S. District Court for the Middle District of Florida.

What Your Business Should Know

There are numerous laws that govern the background screening and hiring process. They cover what employers can and cannot do when determining whether or not to hire an applicant. When businesses don't follow FCRA and local regulations, they can face potentially severe repercussions such as class action lawsuits.

The best way to avoid issues like this is to remain compliant at all times. Background Online provides secure, FCRA compliant background checks that can help you make employment-related decisions about hiring, promotions and other key topics. If you have questions about how we can help you develop a reliable, compliant screening plan, please contact our expert staff for assistance.