Excerpted from an HR Dive blog by Jennifer Carsen

A California district court has certified a class of approximately 5 million people who once applied to Walmart in a suit alleging background check violations (Pitre v. Walmart Stores, Inc., No. 17-cv-01281 (C.D. Cal. Jan. 17, 2019)).

The lawsuit alleges that Walmart willfully included extraneous information in disclosure forms and procured investigative reports without informing class members of their right to request a written summary of their rights under California and federal law.

The court concluded that the proposed class met the requirements for certification and agreed to add two additional class representatives.

Walmart is now one of several employers that have recently faced allegations of improper background check procedures, in violation of the federal Fair Credit Reporting Act (FCRA) and/or state law.

Delta Airlines recently paid $2.3 million to settle a class action involving approximately 44,000 applicants. Like Walmart, Delta was accused of including extraneous information on its disclosure forms. Frito-Lay and Target have also paid out multimillion-dollar background check settlements within the past year.

What’s going on here? The FCRA has specific rules employers must follow. A disclosure form, for example, must consist of only the legally required disclosure. Multi-state employers often try to consolidate and standardize their compliance efforts to satisfy the requirements of multiple jurisdictions, but where background checks are concerned, this move can backfire. As these employers recently found, a single problematic background check form can give rise to a costly class action involving thousands of plaintiffs.

The U.S. Equal Employment Opportunity Commission (EEOC) and the Fair Trade Commission (FTC) have jointly issued background check guidance for employers, suggesting some best practices:

Employers should note that the law has additional requirements and that state and local laws may apply as well.