Randisi & Associates

Pre-Employment Screening Specialists

RANDISI & ASSOCIATES, INC.

410.336.0287
Contact Us
  • Home
  • Services
    • Background Investigations
    • Drug & Alcohol Testing
      • Urine Specimen
      • Oral Fluid Testing
    • QuickApp and QuickApp Pro
  • About Us
    • Why Randisi Associates, Inc.?
    • Testimonials
    • Testimonials in Chesapeake Human Resources
    • Privacy Policy
    • Consumers
  • Resources
    • Marijuana in the Workplace
    • Employment Screening & Drug Testing
    • Negligent Referrals?
    • Interview with Larry Wilner
    • Drug Testing Seminars
  • Partners
  • News
    • Background Checks
    • Business Success
    • Drug Testing
    • Personnel Management
    • Employment News
  • Request A Quote
  • Contact Us
  • Client Login
    • CRL Order Form
  • Payment
You are here: Home / Background Checks / $2.5 million just because there was no stand-alone disclosure!!

$2.5 million just because there was no stand-alone disclosure!!

April 11, 2018 By Jim Randisi

Yep, Costco has agreed to pay nearly $2.5 million to end a Fair Credit Reporting Act class action lawsuit alleging the company failed to use proper stand-alone disclosure notices to obtain background reports about job applicants.

But, guess who gets their money first? After covering the Class’s court costs and attorneys’ fees and incentive awards to the class representatives, the remaining settlement funds will be distributed on a pro rata basis among qualifying Class Members who submit valid and timely claims. We have written a previous blog post why plaintiff attorneys are actively pursuing claims of this nature .   

Important excerpts from the case Costco employee background check settlement are as follows:

“The Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., required Costco to provide Mr. Terrell with a “clear and conspicuous” document that consisted solely of the disclosure that a consumer report may be obtained for employment purposes. Instead of a standalone disclosure, however, Costco provided Mr. Terrell with a document titled, “Pre-Application FCRA Disclosure and Authorization.” As the title suggests, that document included both a disclosure and an authorization permitting Costco to gather information about Mr. Terrell from a wide array of sources, including: [A]ny law enforcement agency, administrator, state or federal agency, institution, school or university (public or private), information service bureau, employer, or insurance company.”

The defendant tried to get the case dismissed alleging that the plaintiff was not injured and thus had no Article III standing. The court disagreed stating as follows:

“the defendant alleges that Costco’s Disclosure and Authorization violates Section 1681b(b)(2)(A) of the FCRA. The court concludes that Section 1681b(b)(2)(A) creates substantive rights to information and privacy and that Mr. Terrell’s assertion that Costco violated this statutory provision therefore sufficiently alleges harm to confer Article III standing.”

The Court further explains pertinent provisions of the FCRA in the court case Costco employee background check settlement  as follows:

“The FCRA’s disclosure and authorization provision, 15 U.S.C. § 1681b(b)(2)(A), is meant to further “Congress’ overarching purposes of ensuring accurate credit reporting, promoting efficient error correction, and protecting privacy,” id. at 1038. Under the provision, potential employers are prohibited from conducting background checks on job applicants unless (i) the employer provides the applicant with “a clear and conspicuous disclosure . . . made in writing . . . in a document that consists solely of the disclosure[] that a consumer report may be obtained for employment purposes,” and (ii) “the [applicant] has authorized in writing . . . the procurement of the report by that person. 15 U.S.C. § 1681b(b)(2)(A)(i)-(ii).”

Lesson to be learned. How hard is the fix? Not hard at all. The consumer reporting agency (CRA) that provides you with background investigations should be able to help you comply. And, you should ask if your CRA can deliver an easy method that allows applicants to complete the process on-line. Doing so avoids managing paper authorization forms and keeps sensitive private information very secure

We have a free QuickApp product that allows easy compliance with FCRA regulations. If you have any questions, give us a call at 410.336.0287.

Filed Under: Background Checks

Testimonials

Video testimonial from Rebecca Yarrison Miller's Minuteman Press Owings … Read More>>

Latest News

  • What Is the Enemy of Customer Service?
  • Pair of Companies in the Trucking Industry Says Positive Marijuana Tests And Federal Regulations Contribute to Driver Shortage
  • Supreme Court Ruling Just Changed the Rules for Cannabis Liability Cases
  • Five Things Not to Do When Giving Gifts to Customers and Employees
  • Random Drug Testing Regulations for Safety-Sensitive Positions Upheld

Afilliate Organizations

Tazworks NAPBS

Request A Quote

How can we Randisi and Associates assist your organization with background checks, drug testing and pre-employment screening?


CLICK HERE to Request a Quote or Consultation

Contact Us

Phone: 410.336.0287
Fax: 410.296.6131

1810 – J York Road PNB # 185
Lutherville, MD 21093
Contact Us

PRIVACY POLICY

©2025 Randisi & Associates, Inc. All Rights Reserved. Site by SPARKS!

We use cookies to make sure you get the best experience on our website. You can learn more by viewing our Privacy Statement.AcceptPrivacy Policy