Background checks are essential to hiring – but even small compliance missteps can lead to significant legal risk and costly settlements.
Barnes & Noble, for example, paid $600,000 after a single footnote in their disclosure form sparked litigation. For HR leaders, this case remains a clear reminder to scrutinize every detail of your background screening process to stay compliant with the Fair Credit Reporting Act (FCRA).
The Barnes & Noble case hinged on the Fair Credit Reporting Act’s strict requirement for a “clear, conspicuous, and standalone” disclosure before obtaining a consumer report. This means the background check disclosure can’t be muddled with extra language, disclaimers or legalese unrelated to the screening itself.
In this instance, a simple footnote stating the disclosure was “not legal advice” opened the door to a class action lawsuit alleging willful violation of the FCRA.
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Job applicant Vicki Hebert filed a class action lawsuit, claiming this extra language violated the FCRA’s requirement for a standalone disclosure.
Barnes & Noble argued the inclusion was an innocent drafting error and that it had relied on legal counsel. A trial court initially agreed, dismissing the case.
However, on appeal, the court reversed,...
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