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The retail giant faced a massive lawsuit for alleged FCRA violations, but the case was decertified in a federal court.

Allegations Against Walmart

In February 2019, we reported that Walmart was being sued for alleged violations of the Fair Credit Reporting Act (FCRA). The suit claimed that Walmart “willfully included extraneous information” in their disclosure document.

This lawsuit represented more than 6.5 million plaintiffs. If Walmart had been found guilty of violating federal and California laws by providing improper disclosure documents to candidates, the employer could have been hit with huge fines.

The Lawsuit Is Decertified

The case, known as Pitre v. Wal-Mart Stores, Inc., was brought to a federal court in California. There were three primary plaintiffs, all of whom had authorized background checks and been hired. After the suit was initially certified by U.S. District Judge David O. Carter, Walmart filed a motion to decertify, suggesting the claim lacked standing.

As the case proceeded, litigators referenced the well-known Spokeo v. Robins decision. That case determined a statutory violation of the FCRA must include a “concrete injury”, meaning a de facto or existing injury or something that involves a genuine risk of harm to establish standing.

During the hearings, the primary plaintiffs only alleged a “bare procedural violation” of the FCRA. They also testified that they were aware that background checks would be run and had provided consent. As such, no concrete injury was found to occur.

The court wrote an opinion that said: “The only injury plaintiffs identify is that, as a result of defendant’s deficient disclosure forms, they ‘have been injured including, but not limited to, having their privacy and statutory rights invaded in violation of the FCRA,’ or, put differently, that defendant ‘obtained plaintiffs’ personal information in violation of their statutorily protected rights. If, as the Supreme Court has established, there is a category of ‘bare procedural violation,’ then it must certainly encompass the wrongdoing alleged in plaintiffs’ first cause of action.”

What Employers Should Know

Walmart was sued for allegedly not following federal laws about disclosing the intent to run a background check. Since no actual injury could be established, the suit was decertified. However, it remains essential for employers to follow relevant laws when providing disclosure and authorization documents.

A disclosure must be a clear, conspicuous document that explains the nature and scope of the intended background investigation and informs the recipient that an organization wishes to run a consumer report on them. The consumer must also receive a written authorization document which they sign to provide consent. Learn more.

If you need to run background checks, please contact us. We provide a proprietary applicant submittal flow that asks the people you screen to send their information directly to us. This saves your organization time and money and also ensures the people you screen receive compliant disclosure and authorization documents, relevant state notices and any other required documentation. Our team is available to assist you Monday through Friday from 5am to 6pm PT.