Lowe’s hit with class action over alleged use of consumer reports for employment decisions

Excerpted from a Class Action blog by Erin Shaak

Lowe’s Companies, Inc. faces a proposed class action that claims the home improvement retailer has unlawfully used job applicants’ consumer reports to make adverse employment decisions without first providing them with a copy of the report.

The case out of North Carolina claims Lowe’s use of background reports to screen prospective employees violates the Fair Credit Reporting Act (FCRA), a federal law that prohibits employers from taking adverse action against a consumer based on the contents of their report without first providing a copy.

Per the suit, the FCRA was designed to provide consumers with a chance to dispute or explain inaccurate or derogatory information in their background checks before a hiring decision is made.

The case says the plaintiff, who applied for a sales specialist position at a Florida Lowe’s store, was unlawfully denied employment based on information in his consumer report without receiving a copy of the report and an opportunity to discuss the information before he was passed over for the job.

The suit contends that since a previous lawsuit that accused Lowe’s of an “identical violation” of the FCRA was settled, the defendant’s alleged conduct was “particularly egregious and willful.”

“So while Defendant should know better about how it performs the simple duties the FCRA imposes in the employment context, the settlement that resulted from Brown apparently caused no substantive changes in the way in which Lowe’s uses background checks in the employment context,” the complaint attests.

The plaintiff says he applied for the sales specialist job with Lowe’s in 2020 and was initially offered the position contingent on a background check. Per the suit, the man had no significant criminal history and was not concerned. Moreover, the plaintiff claims to have turned down another job offer from Home Depot and stopped applying for other jobs based on Lowe’s offer.

Nevertheless, a Lowe’s representative informed the plaintiff via text that he did not pass the background check. Minutes after receiving the text, the plaintiff responded and asked if he would be provided with a copy of the report, according to the complaint. The suit claims that neither Lowe’s nor its consumer reporting agency gave the plaintiff a copy of the report or his rights under the FCRA.

The lawsuit says that if Lowe’s had provided the plaintiff with a copy of his consumer report and allowed him a chance to discuss its contents, the retailer would have learned that the man had no felony convictions, contrary to the report.

The case argues that Lowe’s was well aware of its obligation to provide the plaintiff with a copy of his report and a summary of his FCRA rights prior to taking adverse action, especially since the retailer had previously been sued over the same alleged conduct.

The case looks to cover anyone in the U.S. who, within the last five years, was subject to a consumer report provided to Lowe’s and for whom, based on the contents of that report, a code was entered into Lowe’s computer system indicating the individual was ineligible for hire or continued employment and who was not provided with a copy of the report and a written summary of their FCRA rights at least five business days before the code was entered

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