Walgreens has agreed to settle a case alleging that the national drugstore chain violated the Federal Fair Credit Reporting Act (FCRA) by sending a disposition email—a message notifying job applicants that they were disqualified from employment based on the results of their background check—too soon after the applicants received a copy of the background check on which the company based its decision.
Walgreens denies any wrongdoing.
You can read more about the case here: https://www.consumer-action.org/lawsuits/article/walgreens-fcra-violations
It was alleged that Walmart did not give job applicants enough time between the Pre-Adverse Action Notice and the Adverse Action Notice. The FCRA is unhelpfully silent on the time required between the two notices, but the courts have clarified the issue once and for all by settling on “a reasonable time.”
More seriously, as a rule of thumb, this “reasonable time” is considered by many in the field to be “not less than 5 business days”.
It might be a good time to review your procedures for taking adverse action for employment based on the information you receive from us.
The Federal Trade Commission has provided some guidance for users of consumer reports: https://www.ftc.gov/business-guidance/resources/using-consumer-reports-what-employers-need-know. We have excerpted some of the information below.
Before You Take an Adverse Action
Before you reject a job application, reassign or terminate an employee, deny a promotion, or take any other adverse employment action based on information in a consumer report, you must give the applicant or employee:
- a notice that includes a copy of the consumer report you relied on to make your decision; and
- a copy of A Summary of Your Rights Under the Fair Credit Reporting Act, which the company that gave you the report should have given to you.
Giving the person the notice in advance gives the person the opportunity to review the report and tell you if it is correct.
After You Take an Adverse Action
If you take an adverse action based on information in a consumer report, you must give the applicant or employee a notice of that fact – orally, in writing, or electronically.
An adverse action notice tells people about their rights to see information being reported about them and to correct inaccurate information. The notice must include:
- the name, address, and phone number of the consumer reporting company that supplied the report;
- a statement that the company that supplied the report did not make the decision to take the unfavorable action and can’t give specific reasons for it; and
- a notice of the person’s right to dispute the accuracy or completeness of any information the consumer reporting company furnished, and to get an additional free report from the company if the person asks for it within 60 days.
So that is the overview, but you might review the time between your pre-adverse action notices and the time you make the final decision with your counsel—keeping the “reasonable time” standard in mind.
The purpose of this graduated process is of course to allow the applicant to discuss with you any inaccuracies or explanations before you make a final decision. Jurisdictions can make mistakes on their records and identification errors can occur. A “reasonable time” between the notices allows applicants time to contact you before your decision is final.
Aside from the fairness inherent in this approach, you can find yourself in legal jeopardy if your adverse action processes are lacking.
Blog Published by Shaquira Skarica
