Over the past few years, the Fair Credit Reporting Act (FCRA), the federal law mandating, among other things, procedures and reporting requirements employers must follow when conducting background checks through a third party vendor, has become a hot-button employment issue, and a lucrative one for class action plaintiff attorneys. Similar to other class actions involving technical violations, like wage and hour and “seating” lawsuits, plaintiff class action attorneys have latched on to technical requirements in the law providing for statutory damages when violated. The motivation driving these lawsuits? The promise of easy money. With the potential to collect statutory damages, the possibility of punitive damages, and the ability to obtain attorneys’ fees and costs, the FCRA can be a class action plaintiff’s lawyer’s dream. Class action plaintiffs and their attorneys have increased the filing of class action lawsuits alleging willful violations of the FCRA, and this trend is not slowing. Employers should take steps to ensure compliance with the FCRA to reduce the risk of class action claims seeking statutory penalties.
