HCI Systems, Two Others Facing Lawsuit Over Employee Background Check Authorization Forms

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A California man alleges in a proposed class action that defendants HCI Systems, Orion Risk Management Insurance Services, Inc., and Universal Background Screening, Inc. violated federal law by failing to provide job applicants with “clear and conspicuous” disclosures before obtaining background checks. Citing potential Fair Credit Reporting Act (FCRA) missteps, the lawsuit claims the “Applicant Certification and Authorization” and “FCRA Disclosure and Acknowledgement” forms purporting to authorize the companies to obtain individuals’ background checks are illegal because they contain extraneous provisions and information unrelated to investigating proposed class members’ backgrounds.

The “Applicant Certification and Authorization,” the lawsuit says, contains a provision that unlawfully allows HCI to obtain applicants’ workers’ compensation adjudication records. This form, the case continues, also allegedly contains an illegal indemnification and hold-harmless clause exempting the company from any liability that may come out of a workers’ comp investigation.

The lawsuit then claims the “FCRA Disclosure and Acknowledgement” form, which supposedly grants Universal Background Screening or “another outside organization” permission to perform a background investigation, includes a number of “state law admonitions”—for New York, Maine, Oregon and Washington—that the plaintiff argues are not applicable since the man was applying for a job in California.