Employment Background Solutions (EBS) wants you to be aware of a recent trend by some applicants who are suing potential employers over how clearly they were informed that a background check was being completed. This is resulting in significant legal expenses and costly court settlements that are avoidable with a few proactive steps on your part. Here’s some examples of the issues at hand:

In June 2015, Kohl’s department store was sued in federal court (Northern District of California) as part of a class action lawsuit. The suit alleged the department store conducted illegal and improper background checks as part of their hiring practices. At the core of the issue was the claim that Kohl’s used vague wording in their disclosure form (the consent to conduct a background check) and that the form was not a stand alone document from other paperwork used in the hiring process. On October 5, 2015 the judge in this case granted a motion to dismiss the matter, however left the door open for the plaintiffs to refill their arguments again.

Other large business chains have also been sued in similar actions as noted above. In late 2014, the grocery store chain Publix had to pay a settlement of $6.8 million dollars after the class action case received final approval by a federal court judge in Tennessee. The issue was wording in their disclosure form was ambiguous and applicants did not have a “stand alone” document giving their informed consent to have a background check completed. The chain, Dollar General, is also subject to a similar settlement agreement of $4 million dollars from a 2014 case heard in federal court in Virginia over the same issues.

Take away points:

  • Have your disclosure / consent forms reviewed to ensure the contents are up to date and wording is clear
  • Make sure your applicants understand they are giving consent to have a background check completed as part of the employment process
  • Best practice suggests that making the disclosure form a “stand alone” document helps support your position

The lessons learned from these recent cases can help prevent your business from being caught up in costly litigation.

Employment Background Solutions LLC



Sources:                                                                                                                                                                                                                                                                                                                      Top Class Actions.com                                                                                                                                                                                                                                                                                    Tampa Bay Times – October 29, 2014                                                                                                                                                                                                                                       Fortune.com – January 16, 2015