When was the last time you conducted an FCRA audit of your onboarding practices to confirm FCRA compliance? As a matter of fairness to your candidates, and to avoid litigation, employers must ensure FCRA guidelines have been implemented and practiced.
The Fair Credit Reporting Act (FCRA) prohibits employers from taking an adverse action against job applicants based, in whole or in part, due to information contained in their background check report without first providing a copy of the report and offering the opportunity to dispute the findings.
The 2022 lawsuit, Hale v. Lowe’s Companies, Inc., claimed that Lowe’s use of background reports to screen job applicants resulted in FCRA violations. Hale was offered a job by Lowe’s in March 2020 contingent on a background check that included criminal record research. Lowe’s informed Hale that the offer of employment was rescinded due to a criminal record reported in April 2020. The lawsuit contends that Lowe’s violated Hale’s FCRA rights when it did not provide a copy of his report or a copy of A Summary of Your Rights Under the FCRA to him.
In effect, Lowe’s FCRA compliance failure to provide a copy of the criminal record obtained during the background check deprived Hale of the ability to challenge inaccurate information developed in this search and onboard as a new employee. The FCRA requires employers follow a pre-adverse action process that informs the candidate of the decision that the employer may deny employment based on information contained in the background investigation.
The employer must supply a copy of the report and include the name of the background investigation company and contact information to facilitate the applicant’s filing of a dispute of the information developed in the report. The background vendor must reinvestigate issues brought to their attention and correct any misinformation that was previously reported.
According to the complaint, “Had Defendant bothered to provide Plaintiff with a copy of the consumer report and given him the chance to explain the contents of his report prior to taking adverse action against him, Defendant would have learned that, contrary to the information in the report…, Plaintiff has no felony convictions.”
Lowe’s apparently failed to comply with FCRA guidelines on another occasion. The complaint stated that Lowe’s FCRA prohibited actions were “egregious and willful” since a previous lawsuit Brown v. Lowe’s Companies, Inc. alleged an “identical violation”.
FCRA Compliance Audits
Corporations with hundreds of locations across the country, and smaller companies with multiple locations must implement practices and procedures to ensure that FCRA guidelines are in place at all locations. FCRA best practices suggests that strict documentation and frequent auditing are required to ensure FCRA compliance. Always provide a copy of A Summary of Your Rights Under the FCRA to the applicant prior to the background check and with pre-adverse action and adverse action letters. Always include a copy of the report and a notification that the applicant has a right to dispute the finding in the screening report.