Two class-action lawsuits were filed last week against prominent rental car companies. The Hertz Corporation was sued in San Francisco, and Avis Budget Group was sued in New Jersey. Both lawsuits are seeking to be certified as class actions.
In the Avis case, the plaintiff says Avis offered her a job as a Rental Sales Associate, contingent upon the successful completion of a background check; however, the Disclosure Form provided to the plaintiff was not – in her words – clear, conspicuous or stand-alone. For example, she says the form was two pages long and contained information on how to challenge the accuracy of the background report, it provided state law-related consumer disclosures, and it requested her to acknowledge that the employment decisions made by Avis are based upon legitimate, non-discriminatory reasons.
Not only was the Disclosure not clear, conspicuous and standalone, but the plaintiff alleges that Avis improperly relied upon a grading matrix completed by Sterling Infosystems, Inc., the consumer reporting agency. Using the matrix, Sterling allegedly disclosed to Avis that the plaintiff had a twenty-eight year old conviction for consuming a malt beverage in the passenger area of a motor vehicle. It graded the report as “Alert.”
Plaintiff contends that, instead of merely being an “alert,” Avis acted on the report without any further assessment, calling plaintiff on the phone and telling her she had a criminal record and therefore she could not work for Avis. Indeed, plaintiff claims that the Avis representative calling her would not even disclose the alleged conviction, but instead insisted she “come clean.”
Subsequent to this phone conversation, plaintiff states that she received an email from Avis telling her she did not have a job. A couple of weeks after this, she alleges Avis sent her a contradictory pre-adverse letter telling her she would not have a job if she could not successfully challenge the adverse information on her background check. A week later, she received a second adverse action letter. Allegedly, Avis used forms supplied by Sterling.
Plaintiff explains in her Complaint that the “conviction” was in fact a non-criminal infraction and that it was therefore illegal for any consumer reporting agency to report that information. She is seeking to recover damages for the lost job opportunity, for moving expenses, lost wages, and emotional distress. She also seeks to certify a class of aggrieved fellow applicants.
The plaintiff in the Hertz case provides less detail. He admits a criminal charge was pending against him for felony possession of a controlled substance for sale with a gang enhancement. He was working for a competitor of Hertz while that charge was pending when Hertz recruited him to come work for it. He was offered a job, again contingent upon the successful completion of a background check. He says he resigned his current job in anticipation of starting with Hertz.
He says he first received word that he no longer had a job when a Hertz representative called him to tell him he did not meet Hertz’s “background qualifications.” He alleges Hertz did not supply him with a copy of his background report at that time, and that it was days later before he received it. He has sued both Hertz and the consumer reporting agency, SterlingBackcheck, claiming that both violated the federal Fair Credit Reporting Act:
By not providing him with a clear, conspicuous, standalone Disclosure;
By not providing him with a timely pre-adverse letter with a copy of the background report and a summary of his rights; and
By not giving him adequate time to respond to the background report before deciding to rescind his job offer.
Plaintiff alleges SterlingBackcheck provided Hertz with the supposedly violative forms. These suits have just been filed and all we have heard is the plaintiff’s side of the story. The actual facts may turn out to be different than what has been alleged. Nonetheless, we can still learn from these lawsuits.
Takeaways:
(1) The first time an applicant should ever hear that he may not get a job is through the written pre-adverse letter, which should include a copy of the background report and the summary of federal rights. In other words, do not call the applicant to tell him he does not have a job.
(2) Whenever you use a grading matrix, the matrix score cannot be treated as the final decision. You still must conduct a meaningful, subsequent, independent analysis and review. Matrices can be used to green-light applicants, but they should not be used to weed them out.
(3) Use a clear and conspicuous stand-alone Disclosure Form.
(4) Don’t rely on your background screening company to insure your forms and processes are compliant with the law; the plaintiffs in both cases say the background screening company allegedly supplied defective forms, but the employers were still sued for the use of the forms. Employers cannot shift their compliance obligations to third parties.
Todd M. Higey, Esq. is General Counsel for Employment Screening Services, Inc. This article is provided only for educational purposes; it should not be relied upon as legal advice, and it should not be used, in whole or in part, as a basis for establishing employment practices or policies, nor should it be used for resolving disputes or managing risk. Every reader’s circumstances are unique and legal advice should be obtained only from a lawyer with whom the reader has established an attorney-client relationship.
ESS, accredited by the National Association of Professional Background Screeners, is dedicated to protecting companies and their employees through extensive background screenings. ESS combines experience, advanced technology and unparalleled customer service to ensure that an employer’s screening services are fast, affordable and effective. The company also offers drug screening, electronic fingerprinting, third-party exit interviewing, credentialing, and E-Verify processing.
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