Are You Taking Proper Hiring Procedures to Avoid Class Action Lawsuits?

Many hiring managers and H.R. professionals have recently heard the repeated cries of legal publications over the ever increasing EEOC enforcement and FCRA Class Action Lawsuits against employers.

Politically motivated EEOC and litigation hungry attorneys, have found a new industry that have them foaming at the mouth;

  • “Adverse Action”
  • “Proper policy on Disclosure and Authorizations requirements during the hiring process”

If these two processes have not been reviewed in the last six months with your team, I strongly recommend that you STOP, drop everything you are doing RIGHT NOW, call your legal counsel and start an immediate review of your documents and hiring practices.

A class action lawsuit was filed against Amazon, Inc. on April 7, 2015, (Williams vs Amazon in Seattle) for a process failure from their staffing firm.  It alleges the staffing firm failed to comply with adverse action notice requirements of the Federal Credit Reporting Act of the FCRA, where employment was not given due to a past criminal matter.   Adverse Action was not followed properly, and the applicant at no time received a copy of his report, or received any pre- adverse action documents required by FCRA.

The FCRA is clear, if the employer intends to take adverse action as a result of a report of his past history (criminal, driving, credit, references, etc.) there are mandated steps the employer must take in order to give the applicant an opportunity to dispute the report.

Gone are the days of, “I chose somebody more qualified”.  These are now the days of documentation, documentation and more, you guessed it, documentation. You must document why each applicant was not chosen, preferably by a panel of your HR team, following the hiring policies set up by your legal counsel.

Amazon will now have to spend an incredible amount of money to defend their hiring practices for allowing their staffing firm to be so complacent with their hiring process. The staffing firm will lose the business of one of their largest customers, and another lawsuit will most likely be settled for cost savings, giving even more legitimacy to the crazy whirlwind of this new trend of litigation. Other Companies in this same predicament are Napa Auto Parts, O’reilly Auto Parts, Whole Foods and many more.

Again, it is suggested that if you are in a position that makes hiring decisions for your company, stop what are you doing right now, contact your Consumer Reporting Agency (background check company), contact your legal counsel and get your team on the same page.    Update your documents, forms and processes in the correct order that is compliant with EEOC and FCRA requirements.

Brian D. Chapman, CEO
MBI Worldwide Background Checks