Kmart Settles FCRA Class Action for $3 Million

Kmart Corporation has agreed to a $3 million settlement stemming from allegations that it violated the Fair Credit Reporting Act (FCRA) when using background checks to make employment decisions. The class-action suit alleged Kmart violated the FCRA by failing to provide “certain specific disclosures before it use[d] the report for an adverse action.” The putative class action complaint argued that a purpose of the FCRA is to grant consumers a meaningful opportunity to correct inaccuracies and omissions in background reports before employers take adverse employment actions. In the case, the plaintiff’s rights under the FCRA were undermined when Kmart deprived them of an opportunity to make such a correction. Kmart has denied any fault, wrongdoing or liability whatsoever, but will pay $3 million and will be granted a ‘narrow release’ covering only the FCRA claims.

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