When Did You Last Update Your Background Check Materials?  Maybe It’s Time.

Dollar General just agreed to pay $4 million to settle a class action background check case based on its alleged violations of the Fair Credit Reporting Act (FCRA). Marcum v. Dolgencorp, Inc., Civil Action No. 3:12cv108 (E.D.Va.). That’s right—$4 million for a FCRA case.

As you know, FCRA requires employers in the United States who use pre-employment background checks on candidates to:

  1. notify the candidate that you are going to do the background check and get his or her written permission before you do the background check, and
  2. notify the candidate that you are considering taking adverse action AND give the candidate a copy of the report and a statement of his or her rights under FCRA, before you make an adverse decision based on a background check.

15 U.S.C. Section 1681b(b)(2) and (3).  The Consumer Financial Protection Bureau (CFPB) issues a Summary of Rights form that most employers use for this second notice.

In this case, the plaintiffs alleged that Dollar General failed to give them notice of the adverse employment action before it was made (or at least not enough notice) OR provided an outdated Summary of Rights. Dollar General denied all of these allegations but has agreed to settle the matter.

If you are conducting background checks, make sure you are sending sufficient notice to candidates before you make a decision. How much notice is sufficient? There is no bright line but some guidance suggests five days. Given that the purpose of the notice is to give a candidate a chance to check his or her report and let you know that it is inaccurate, five to seven business days is probably a good rule of thumb. Also, go ahead and make sure you have the latest version of the Summary of Rights from the CFPB’s website.