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Immigration Compliance and Background Screening

Walt Disney Company and First Choice Background Screening are Subjects of FCRA Class Action Claims

Posted in Background Check

Two class action complaints were filed recently in the Superior Court of California County of Los Angeles court alleging violations of the Fair Credit Reporting Act (“FCRA”).  The cases are Culberson v. The Walt Disney Company (Case No. BC526351) (“Disney”) and Ruffing v. First Choice Background Screening (Case No. BC526352).

The claim against Disney is that they knowingly violated the FCRA by failing to provide job applicants and employees with pre-adverse and adverse action notices, as well as failing to provide job applicants with a copy of their consumer report (aka background check report), pursuant to sections 604(b)(3) and 615.

In the Disney case, Mr. Culberson was hired by Disney and a background check was conducted by Sterling Infosystems, Inc (“Sterling”).  The initial background check report showed that Mr. Culberson had a 1998 conviction, although it had been expunged.  Mr. Culberson alleges that Disney never provided him with the appropriate adverse action notices nor provided him with a copy of his background check report.  Upon contacting Sterling, Mr. Culberson determined that the report provided to Disney contained the expunged conviction.  Sterling subsequently issued a new report without the expunged record.

In addition to FCRA violations, Disney is charged with an alleged violation of California Labor Code §432.7(a) for considering a record of arrest which did not lead to a conviction.

In a separate class action complaint, also filed in the Superior Court of California County of Los Angeles Court earlier this month, First Choice Background Screening d/b/a First Choice Research Screening (“First Choice”) is charged with multiple FCRA violations.

First, the suit alleges that First Choice violated section 604(b)(2)(A) of the FCRA by providing employers with a disclosure and authorization form that includes a release of liability as well as requiring that applicants state whether they have been convicted of a crime.   The allegation is that First Choice’s disclosure and authorization form does not consist solely of the disclosure. Second, the claim alleges First Choice violated the FCRA by not using reasonable procedures to assure maximum possibly accuracy of the reports as well as strict procedures regarding the reporting of public record information pursuant to sections 607(b) and 613(a)(2).

Takeaway – both cases involve employment screening and should serve as a reminder to employers and consumer reporting agencies (“CRA”) to be mindful of their obligations under the FCRA. 

  • For CRAs it is important to consider the disclosure and authorization template you provide your end-users to ensure that it does not contain additional verbiage that could be challenged by plaintiff’s counsel as a notice which is not a “clear and conspicuous disclosure”.  See section 604(b)(2) of the FCRA.   
  •  For employers, whether it is handled by your CRA or internally, when using background check reports for employment screening purposes you must conduct the pre-adverse and adverse action steps, as applicable, when using information from such a report prior to taking any adverse action against the job applicant.  See sections 604 and 615 of the FCRA.

If you would like a copy of either complaint please send me an email at montserrat.miller@agg.com.