Petco just reached a $1.2 million settlement with two job applicants that alleged concrete injury under the Fair Credit Reporting Act (FCRA). Representing a class of over 37,000 job applicants, both plaintiffs alleged that Petco “buries” the background check disclosure in its online application. One of the plaintiffs also argued that she was denied employment based on the results of her background check and that Petco did not provide a reason for the rejection.
Petco motioned to have the original claim dismissed but a federal judge denied Petco’s claim to dismiss, siding with the plaintiffs’ claim that the company’s policy had willfully violated the Fair Credit Reporting Act (FCRA).
As more and more employers transition to online applications or Applicant Tracking Systems (ATS), Petco’s recent settlement is significant because it illustrates the importance of establishing clear pre-employment screening procedures that comply with FCRA guidelines, whether or not the process is online. Employers should be meticulous when establishing an online application process to ensure that it does not violate the FCRA or analogous state laws. Arguably the biggest liability is the disclosure. The online disclosure should be handled in the same manner as a hard copy disclosure (clear and conspicuous disclosure on document consisting solely of the disclosure). One way to accomplish this is to have the online disclosure on a separate tab or page in the online application process.
What protocols do you have in place to ensure that your online application process is FCRA compliant? Our clients are leveraging CRC’s Compliant Support Services to ensure that their online process is compliant with the FCRA. Want to find out how? Contact CRC’s Sales team for more information!
Jacklyn Feist, et al. v. Petco Animal Supplies Inc., et al., Case No. 3:16-cv-01369, in the U.S. District Court for the Southern District of California