The new wave of class action lawsuits are based largely on technical violations of the Fair Credit Reporting Act (FCRA). The FCRA, by its name alone, appears unlikely to apply to most employment contexts, but think again. The FCRA applies to any business that uses a consumer report for employment purposes. Consumer reports may include information related to criminal background checks, drug tests, driving records, employment history, credit checks, and more, when conducted by a third party. For example, if a company obtains a consumer report about a job applicant or uses a consumer report to terminate an employee, then the FCRA is implicated. If these situations strike a chord, then now is the time to reexamine your compliance with the FCRA; if not, be forewarned that violations of the FCRA have led to class action settlements that have cost employers millions of dollars.
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Originally published in Daily Business Review
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