Feb 06

Employers Face Class Action Lawsuits for Online Applications in Violation of Fair Credit Reporting Act

In a response to a lack of communication during the online application process, the National Law Forum reports that an increasing number of job seekers are suing employers who are in violation of theFair Credit Reporting Act (FCRA).

In a recent class action lawsuit against K-Mart, prosecutors say that the online applications that they filled out for positions at K-Mart are in violation of the FCRA. The retailer allegedly utilizes buttons on their online applications that either say “decline” or “accept.” These buttons are the only means offered by K-Mart to obtain an applicant’s consent to submit to a background. Apparently, this simple button click is not the correct way to obtain a background check authorization from an applicant.

According to the Fair Credit Reporting Act, in order to provide full disclosure to a job applicant:

a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; and the consumer has authorized in writing (which authorization may be made on the document referred to in clause (i)) the procurement of the report by that person.

The simplicity of a “decline” or “accept” button does not constitute a written authorization, prosecutors say. Employers who utilize online job applications argue that under theElectronic Signatures in Global and National Commerce Act (E-Sign), electronically authorizing background checks are permitted. However, E-sign only applies to consumers or customers, not job applicants.

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