Walmart Hit With A Huge FCRA Lawsuit

February 12, 2019
Around five million people are participating in a class action lawsuit that alleges the retailer violated federally mandated background check laws.
Backgrounds Online | February 12, 2019

Around five million people are participating in a class action lawsuit that alleges the retailer violated federally mandated background check laws.

About The Case

Walmart was accused of allegedly violating the Fair Credit Reporting Act (FCRA) during their background screening process. A class action lawsuit stated the retailer “willfully included extraneous information” in their disclosure document.

The case is titled Pitre v. Walmart Stores, Inc. In January 2019, it was officially certified by a California court, which means it is allowed to proceed. Randy Pitre, lead plaintiff in this suit, suggested that Walmart “failed to provide adequate notice of the consumer report as well as failed to secure legal authorization to obtain it.”

In addition to Pitre, the court approved two other class representatives for this case.

Federal Law For Disclosures

According to allegations in the lawsuit, Walmart obtained consumer reports on job seekers without first receiving proper authorization. The retailer is accused of including extraneous content in their disclosure.

The FCRA stipulates that a disclosure must be a standalone document that is clear, concise and does not contain any additional language. This document may not have confusing or verbose text. Pitre stated that Walmart’s disclosure contains both confusing language and content that is prohibited by federal law.

Along with a disclosure, the FCRA stipulates that candidates must receive a standalone authorization form and a document known as A Summary of Your Rights Under the Fair Credit Reporting Act. This document notifies individuals of their rights regarding how consumer reports can be obtained and utilized. The suit against Walmart also alleges that the retailer did not provide this and therefore failed to properly inform applicants of rights that are granted by federal law.

What Employers Should Know

The lawsuit against Walmart is not the only one that has recently been filed against an employer for allegedly failing to follow federal background screening laws. Numerous high-profile corporations have been sued for similar alleged violations. Situations like these, however, can easily be avoided.

Every employer should know that the FCRA stipulates consumers must receive and agree to a standalone disclosure. This document informs the consumer that an employer wishes to run a background check on them. Before a background screening can begin, the consumer must also receive a standalone authorization and provide their consent. Both documents must not contain any unnecessary or ambiguous language. This includes waivers, state laws or even administrative statements.

By ensuring that every candidate you are considering for employment receives FCRA compliant documents, you can protect your business from class action lawsuits like the one against Walmart. To be even safer, best policy is to interview candidates, determine which person or people you are considering and only then initiate a background screening. Some states also require employers to extend a conditional job offer before running a background check. Learn more about state employment laws that may affect you.

Backgrounds Online provides a packet that contains a sample disclosure, authorization and the required Summary of Rights document. We also offer a service that empowers our clients to have candidates submit the information we need to run a background check directly to us. By taking advantage of this service, employers can save time, prevent data entry errors and rest assured that the people they screen see and authorize all required relevant compliance documents.

If you have questions about background screening or how we can help improve your process, please contact us today. Our highly trained and educated team is available Monday through Friday from 5am to 6pm PT.