In case you missed it, on November 1, 2013 a class action lawsuit was filed against The Walt Disney Company in the Superior Court of California. The complaint alleges that Disney failed to properly notify applicants of possible adverse actions related to background checks in violation of the Fair Credit Reporting Act (FCRA).
The plaintiff in this case claims that Disney failed to provide what is known as an adverse action notice. According to the FCRA whenever an employer intends to take an adverse action – such as deciding not to hire – based on the information returned in a background check, the employer is required to give applicants notice before a final decision is made. The purpose of this notice is to provide the applicant with an opportunity to explain or correct any information contained in the background check report. After a meaningful opportunity to respond the employer is required to provide the applicant with a second notice if the adverse decision is final.
The background check report for the plaintiff showed a thirteen year old criminal conviction (which as it turns out had been expunged from his record). According to the plaintiff, he:
- Did not receive notice before a decision was made
- Never received a copy of his report from Disney
- Did not receive a final adverse action notice
The FCRA has become a popular statute among for plaintiffs because of the statutory damages of up to $1,000 per violation, actual damages, attorney’s fees, as well as punitive damages. As in this case it is a perfect recipe for class action lawsuits.
We don’t yet know Disney’s response. But if the facts as alleged are true and this represents a larger pattern within Disney’s hiring practices then this could be quite expensive for Disney.
Background Screening is an important and useful tool for employers to make wise hiring decisions, but as with any tool, it must be used properly.
