Stellar Partners’ Use of Background Reports for Prospective Employees Violated Federal Law, Suit Says

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Stellar Partners, Inc. has been hit with a proposed class action lawsuit over allegations the airport retail operator failed to make required disclosures before taking adverse action against job applicants based on their consumer reports.

Under the Fair Credit Reporting Act (FCRA), the complaint explains, companies looking to obtain background reports on prospective employees are required to first provide applicants with a standalone disclosure, situated in a form by itself, in which candidates are informed that their consumer reports may be obtained for employment purposes. Employers are then required to receive written authorization from the applicant before commencing background checks, according to the case.

With regard to the lead plaintiff, the case claims the woman was offered a job by the defendant on August 13, 2019, conditioned on her ability to pass a background check. As part of her application process, the plaintiff filled out paperwork that purportedly authorized the defendant to procure her consumer report from Osa Consulting Group (OCG), the lawsuit states.

According to the complaint, none of the materials the plaintiff received from Stellar contained an FCRA-compliant disclosure that informed the woman of the company’s intention to perform a background check or was situated in a document that consisted solely of the disclosure. Therefore, the case argues, the defendant failed to properly obtain the plaintiff’s authorization before acquiring her consumer report.

Furthermore, the FCRA requires companies to provide candidates with a copy of their consumer report along with a written description of their rights under the FCRA before taking adverse action. The lawsuit explains that this requirement provides applicants an opportunity to correct erroneous information contained within their report or discuss any negative items with their prospective employer.

The case states that on August 22, 2019, the plaintiff received an email from Stellar Partners in which she was informed that the defendant had decided to take the “adverse action” of delaying her start date, due in part to the contents of her consumer report. The plaintiff claims that this email advised her to dispute any inaccurate information directly with Freeh Group International Solutions yet did not contain her consumer report.

After she managed to obtain a copy of her consumer report, the plaintiff discovered the report contained entries, including allegations of theft, that were “inaccurate or simply did not belong to Plaintiff,” the complaint contends. The plaintiff subsequently made multiple attempts to dispute the erroneous information with Freeh Group and OCG but was informed she had no right to do so, according to the suit. The case claims that as a result of the erroneous information contained in the consumer report furnished by OCG, the plaintiff ultimately lost her job with Stellar on September 4, 2019.

The complaint argues that Stellar ran afoul of the FCRA by failing to send the plaintiff a copy of her report until August 26, 2019, significantly after the defendant had taken the adverse action of putting her employment on hold. 

The lawsuit looks to cover all consumers who, within the last five years, either applied for a job or promotion with Stellar or had the defendant take adverse action against them based on information contained in their consumer report.