Cardinal Logistics Management Hit with Class Action Over Employee Background Checks

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A former Cardinal Logistics Management Corporation employee alleges the company has procured background reports for employment purposes without providing required disclosures and obtaining authorization from the subjects of the reports.

The 16-page case alleges that although the Fair Credit Reporting Act (FCRA) mandates that employers, before obtaining a prospective employee’s consumer report, provide a standalone “clear and conspicuous” disclosure that it will procure their report for employment purposes and obtain the individual’s written authorization, Cardinal has failed to do so.

The plaintiff, who worked for the logistics company until October 2021, claims Cardinal has also violated several California laws by failing to provide a compliant background check disclosure and secure consumers’ written authorization before obtaining their reports.

The lawsuit more specifically alleges that Cardinal has violated the FCRA by:

• Including within its background check disclosure “superfluous information”—such as the identifying information of a consumer reporting agency that did not obtain or procure the consumer report, and information about various state disclosure requirements;
• “[B]urying” the disclosure in small font within “a lengthy employment package” that includes extraneous information;
• Failing to obtain written authorization before procuring a consumer report, including by doing so when a consumer’s authorization has expired;
• Including a liability waiver in the same document as the disclosure;
• Including a purported authorization for third parties to release information to Cardinal about the consumer that is different from the authorization for Cardinal to obtain their consumer report; and
• Failing to provide consumers who are the subjects of its background checks with a summary of their rights under the FCRA.

The lawsuit looks to represent current, former and prospective employees of Cardinal who applied for a job with the company and had a background check performed within the five years before the complaint was filed and until the date that final judgment is entered.

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