Delta to pay $2.3M to settle background check dispute
- Delta Air Lines has agreed to pay $2.3 million to settle a class-action lawsuit alleging it failed to provide approximately 44,000 applicants with a stand-alone background check disclosure, in violation of the federal Fair Credit Reporting Act (FCRA) and California law.
- Delta's forms contained extraneous and misleading information, according to plaintiffs, including information about state laws; they also allegedly could not be understood without reading the FCRA itself.
- The plaintiffs' motion to the U.S. District Court for the Northern District of California seeking approval of the agreement argued that the settlement was reasonable, with a gross recovery amount of approximately $52.15 per class member "compar[ing] favorably to recent FCRA settlements."
Delta wasn't completely indifferent to the FCRA's disclosure requirements — it provided applicants with a multi-page form. However, as the motion noted, the FCRA requires a "clear and conspicuous disclosure … in a document that consists solely of the disclosure" (emphasis added).
Because Delta's form contained other information, the plaintiffs argued, it violated the FCRA. The plaintiffs conceded that it was not clear whether Delta's violation was "willful."
This settlement is the latest in a string of employers paying big for alleged background check errors. Last spring, Frito-Lay paid $2.4 million to settle a very similar case, and Target forked over $3.7 million to settle a class action over a background check policy that allegedly discriminated against African-American and Latino applicants.
The U.S. Equal Employment Opportunity Commission and the Federal Trade Commission offer some guidance for employers on conducting legal background checks, including the following: "Tell the applicant or employee you might use the information for decisions about his or her employment. This notice must be in writing and in a stand-alone format. The notice can't be in an employment application. You can include some minor additional information in the notice (like a brief description of the nature of consumer reports), but only if it doesn't confuse or detract from the notice."
- U.S. Equal Employment Opportunity Commission Background Checks: What Employers Need To Know