Litigation Update: Major Airline Settles FCRA Claim for $2.3 Million

2019 is off to a red hot litigation start with the announcement that a major airline will settle FCRA claims for $2.3 million covering a class of about approximately 44,100 individuals. The settlement will now come before the court for approval in February.

Originally filed in October 2017, the plaintiff claimed the airline used disclosure forms that violated the Fair Credit Reporting Act (FCRA), the California Investigative Consumer Reporting Agencies Act (ICRAA) and the Consumer Credit Reporting Agencies Act (CCRAA). In particular, the plaintiff alleged the employer failed to provide job applicants with a standalone document that consists solely of the disclosure.

There are two forms used by the employer at issue in the complaint. Where did these forms go wrong in the plaintiff’s eyes? Some examples are included below:

• Statement that “This authorization does not include the release of my medical information.”
• Statement that “I understand, however, that giving my consent does not require [employer] to hire me nor does it create any sort of contract, obligation or duty between me and [employer].”
• Requires the “reader to read the Fair Credit Reporting Act itself to understand it” by not including a definition of what a “consumer report” is.
• An instructions page which stated that the employer or consumer reporting agency will contact them to obtain additional information if needed.

From the settlement amount, the plaintiff’s attorneys will receive $575,000 in fees and $10,000 in out of pocket costs incurred in litigating this matter.

Employers are strongly encouraged to review their disclosure and authorization forms, along with their adverse action processes, with qualified legal counsel.