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Background Check Lawsuit: Legal Rights of Employees, Applicants

This Alert Affects:

Employees and job applicants who were fired or denied employment due to the findings of an employment background check.

Employees and job applicants who participate in background check lawsuits may be entitled to monetary damages, which include actual damages, punitive damages and reasonable attorneys' fees and costs.
Additional Details
Regarding employment background checks, The Fair Credit Reporting Act requires that the company must notify the individual when an adverse action, such as termination or denial of employment, is made on the basis of the background check and identify the company which provided the report, so that its accuracy can be verified or contested by the employee or job applicant.
Type of Lawsuit
Class Action

Employees and job applicants who underwent background checks for employment purposes may have legal recourse if their employer or potential employer failed to comply with federal background check laws. When an employee or job applicant is terminated or denied employment due to a finding in their employment background check, the company is required to take certain actions under the Fair Credit Reporting Act. When a company fails to met these obligations, the employee or applicant may have legal recourse to recover financial compensation.

Were you fired or turned down a job due to an employment background check? Fill out our free case review form to find out if you can participate in a background check lawsuit to recover financial compensation.

Background Check Legal Rights

The Fair Credit Reporting Act provides employees and job applicants with a number of background check legal rights. For instance, according to background check laws, companies are required to obtain written permission from the employee or applicant before performing a background check and provide a disclosure, separate from other documents (e.g. employment applications), stating that a background check may be conducted for employment purposes.

Additionally, when a company decides to hire, demote, or deny employment on the basis of a background check, it must:

  1. Provide the applicant or employee with a copy of the background check
  2. Provide the applicant or employee with a summary of their rights under the Fair Credit Reporting Act

The purpose of this action is to provide the individual with an opportunity to dispute any incorrect information contained in the background check report to avoid being fired or denied employment. Should the company fail to furnish this information, the employee or applicant may be eligible for legal recourse.

If you were fired or denied employment without receiving a copy of your background check report and legal rights, fill out our no cost, no obligation case review form to find out if you are entitled to financial compensation.

Firing or Denying Employment: Background Check Laws

When a company decides to fire or deny employment to an individual based on a background check, it is required to take certain actions. For instance, it must wait a reasonable period of time before taking any adverse action. Additionally, when it fires or denies employment on the basis of a background check, it must provide a notice with the following information:

  • The name and contact information of the reporting agency
  • A statement informing the individual that the reporting agency did not make the adverse employment decision
  • Notification that the applicant or employee has 60 days to obtain a copy of his background check
  • Notice to the employee or applicant of their right to dispute the information on the report with the reporting agency that furnished it

Discrimination in Background Checks

While a number of employers seek background checks for what they claim are security reasons, it has been alleged that background checks are racially biased and work primarily to disqualify minorities from employment. In fact, in light of these allegations, the EEOC is looking to review its policies regarding potential discrimination from employers' use of arrest and conviction records. The agency has discussed a potential review of its guidance on criminal background checks as concerns have arisen that African Americans and Hispanics may be discriminated against in "blanket" hiring policies which exclude applicants with past convictions.

Several employers have already faced legal actions claiming that their hiring policies were discriminatory. For instance, a background check lawsuit against Pepsi beverages resulted in a $3.13 million settlement to resolve claims that the company discriminated against African Americans in its background checks. The Equal Employment Opportunity Commission (EEOC) found that Pepsi disproportionately excluded African American applicants, as the company’s hiring policy did not permit those who had been arrested to be hired for permanent jobs, even if they were never actually convicted of any crime. The EEOC’s investigation found that denying employment based on arrest and conviction records could be discriminatory when it is not relevant to the position, as it can limit job openings for applicants based on their race. Pepsi had to also hire any of the 300 African Americans adversely affected by Pepsi’s hiring policy, if they would still like to apply to the company.

If you feel you were discriminated against in a background check, you may be able to file a claim to recover financial compensation. Fill out our free case review form with details of your complaints to find out if you are eligible.

Background Check Lawsuits

When a company chooses to terminate or deny employment on the basis of a background check, they have certain responsibilities under background check laws. Should they fail to meet these obligations, employees and job applicants who lost work as a result of their background checks may have legal recourse. To find out if you can participate in a background check lawsuit, complete our free case evaluation form. This online legal consultation is offered at no cost and can help determine whether your background check legal rights were violated. If so, you may be entitled to financial compensation.

Sep 23, 2013
Newly Filed / Newly Settled

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