Class Action Lawsuit Alleges Whole Foods Violated the FCRA
In a recent client alert, Corporate Screening shared with clients that Whole Foods may be in a lot of trouble for allegedly violating the federal Fair Credit Reporting Act (FCRA). Here are the details contained in the alert:
On February 9, 2014, a class action lawsuit was filed in the U.S. District Court for the Northern District of California alleging that Whole Foods Market California, Inc. violated the FCRA because their disclosure form authorizing a background check (aka consumer report) did not comply with the FCRA statute that the document “consists solely of the disclosure.”
The complaint filed in Gezahegne v. Whole Foods Market California Inc., Case No. 4:14-cv-00592, contends that the online job application for Whole Foods contained a disclosure/authorization form that included language releasing those who obtained the consumer reports from all liability. The suit argues that this additional language made the form “facially invalid” as the form no longer constituted a “document that consists solely of the disclosure.”
The suit further alleges that the consent form contained several other paragraphs including an admission that the applicant has not knowingly withheld any information that might adversely affect his chances for employment; the application does not create an employment contract; the applicant waives receipt of a copy of any public record.
Please note, the FCRA considers the Disclosure and Authorization to be two separate notices and an FTC opinion letter states the notices can be in a single document. However, if the disclosure and authorization are in a single document neither the disclosure nor authorization should contain any extraneous information or notices.
The lawsuit seeks damages in the amount of $1,000.00 for each individual for whom Whole Foods obtained a consumer report between January 28, 2009 and the present. As you can imagine, this class could consist of thousands of individuals.
If you’ve read our past blogs and newsletters, you know that Corporate Screening has mentioned the importance of providing a “clear and conspicuous” form that “consists solely of the disclosure” prior to requesting a consumer report. This lawsuit serves as a stark reminder of the importance of adhering to this main tenant of the FCRA.
Employers, please review your disclosure and authorization forms to ensure that they comply with FCRA regulations. Any disclosures you wish to make to applicants regarding other aspects of the onboarding process should not be conflated with the FCRA disclosure.
If you have any questions relating to compliance with the FCRA or other laws or regulations, Corporate Screening is here to assist you. We offer a Screening Program Assessment (SPA) which will assess your current background screening program and measures your program against industry standards, best practice and legal compliance.