Stone Brewing Co. Hit with Class Action Over Allegedly Non-Compliant Background Check Authorization Forms for Job Seekers

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A proposed class action out of California alleges Stone Brewing Co. has routinely obtained and used background report information on prospective employees without providing state- and federally compliant disclosure forms.

The federal Fair Credit Reporting Act (FCRA) and California’s Investigative Consumer Reporting Agencies Act (ICRAA) and Consumer Credit Reporting Agencies Act (CCRAA) lay out stringent requirements for companies looking to procure background information on a job applicant, the case says. According to the lawsuit, an employer may not obtain a job applicant’s background report without first providing the individual with a “clear and conspicuous” disclosure in a standalone document consisting only of the disclosure that a background check may be obtained for employment purposes. This form is often called a “pre-authorization” form, the suit says, and is meant to prevent consumers from being distracted by extraneous information when being informed of their rights.

The pre-authorization form provided to job applicants by Stone Brewing contained “extraneous and irrelevant information,” the lawsuit alleges. The plaintiff, who claims to have applied for a job with Stone in 2015, says the disclosure form he received from the company included more than 10 extra provisions—including certain information for job applicants in particular states, contact information for Stone’s third-party background check provider and a blank box requesting biographical information—in violation of FCRA mandates.

Although a background check disclosure and authorization may be combined into a single document, such a document must be clear and conspicuous and without extraneous information, the case says. The lawsuit argues the extra information provided to the plaintiff in addition to the disclosure of his rights and authorization for Stone to use his background information for employment purposes was “unclear” and not reasonably understandable to job applicants.

Among the alleged deficiencies in the defendant’s background check forms, the lawsuit highlights a provision that appears to provide Stone Brewing Co. with “evergreen consent” to obtain an individual’s background report. The case argues that not only is this information presented to applicants in a confusing manner, but it runs in direct contrivance to the legal requirement that reports be procured only for a “permissible purpose." 

The suit looks to cover a nationwide class of individuals who applied for a job with Stone Brewing Co. and executed the company’s FCRA disclosure form within the last five years, as well as two California-only classes. Initially filed in San Diego County Superior Court, the lawsuit has been removed to California’s Southern District.