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On April 18, 2017, the Equal Employment Opportunity Commission (“EEOC”) filed a putative class action against the SLS Hotel South Beach in Miami, Florida (“Hotel”), alleging that the Hotel violated Title VII by firing black Haitian dishwashers who worked in the kitchen and serviced several restaurants in the Hotel – including the Bazaar by Jose Andres, Katsuya and Hyde Beach – and replacing them with white and Hispanic workers, who were supplied by a staffing agency, National Service Group (“NSG”). These guidelines should be integrated into a company’s hiring practices to avoid the substantial costs and risks associated with FCRA lawsuits, which can often include efforts to proceed as a class action.ĮEOC Suit Alleges Luxury Hotel Discriminated Against Haitian Employees and Used Staffing Agency as a Conduit to Discriminate Don’t include them in the FCRA disclosure and authorization document. If the employer has additional waivers, authorizations or disclosures that it provides to prospective employees, it should do so in a separate document. Avoid overly broad authorizations that permit the release of information that the FCRA doesn’t allow to be included in a background screening report – for example, bankruptcies that are more than 10-years old.
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Next, the employer must give sufficient time to review the report so the candidate can challenge any elements that might be incorrect. If the background screening report reveals facts affecting a decision not to hire, the employer must notify the candidate of the results of the report and provide a copy.Before obtaining a background screening report about a prospective employee, disclose to the person the intention to get the report and get the candidate’s written authorization allowing you to do that.Background screening reports are “consumer reports” under the FCRA when they serve as a factor in determining a person’s eligibility for employment, housing, credit, insurance or other purposes and they include information “bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living.”įCRA requires the following of employers: As the Federal Trade Commission reminds in a recent blog posting on its website, employers must avoid lapses that could create FCRA liability. On April 28, 2017, the FTC published an education piece which provides information for employers regarding disclosure and authorization forms.įTC offers FCRA guidance on background screening reportsĬompanies often face lawsuits under the Fair Credit Reporting Act (FCRA) regarding the sufficiency of disclosures informing prospective employees that a background screening report will be obtained. The legislation is pending in the House Financial Services Committee. This legislation will benefit background screening companies as well as employers and landlords who request background screening reports under the FCRA and are subject to growing class action litigation. 2359) to amend the Fair Credit Reporting Act (FCRA) to place caps on damages stemming from class action litigation. Barry Loudermilk (R-GA) introduced the FCRA Liability Harmonization Act (H.R. Proposed FCRA Liability Harmonization Act