What if you were faced with the prospect of paying up to $1000.00 to every person that ever applied to your company PLUS punitive damages?
Domino’s Pizza faces this type of dilemma with the January 25th ruling in Singleton v. Domino’s Pizza, LLC, (Civil Action No. DKC 11-1823, 2012 WL 245965)
In this case, Domino’s Pizza allegedly failed to follow the letter of the law in regards to the Fair Credit Reporting Act as it pertains to background checks and two of their employees.
Although one could argue that Domino’s followed the law, it is alleged they failed to follow “the letter of the law.” Not following “the letter of the law” is a small but important distinction that may end up costing Domino’s millions of dollars in statutory and punitive fees or fines.
The lawsuit has several main contentions, allegations and facts:
• That both plaintiffs signed a background release form, had the background check run, started working, and later were terminated based on information gleaned from the report.
• The plaintiffs were not provided with a copy of the report or advised of any of their rights before their employment was terminated. In other words, the pre-adverse and adverse action laws were not followed properly
• Both plaintiffs also alleged that the background screening consent they signed included a release of liability for the background check on the form that was part of the application packet. As a result, according to the complaint, the employer failed to meet the legal requirement for a “standalone” form since the form contained extraneous information and was not separate.
Confused? You shouldn’t be. Trial lawyers, the EEOC and specific states and municipalities have made it clear that 2012 will be a year of increased litigation towards employers whose hiring practices fail to follow the “letter of the law”. Consumers and trial lawyers are becoming more aware of the FCRA laws regarding pre-employment screening and as a result, lawsuits are skyrocketing.
The Domino’s case is very similar to one filed against a major financial institution in the latter part of 2011 and is part of a national trend.
Here are some points to consider in the Domino’s Pizza case as well as the Financial Institution case:
• If true as alleged, Domino’s disclosure form should not have contained a release of liability clause. Many lawyers would argue that the clause has little if any value at all regardless of positioning.
• Any employer should consider keeping the background check form separate from any application package.
• The pre-adverse and post-adverse action rules are absolutely critical to understand and follow… to the letter.
• Background screening is highly and legally regulated. Employers are well advised to scrutinize their forms, processes and screening immediately.
It is nearly impossible to cover all potential litigation pitfalls regarding your job application, drug screening or background check program (including pre-adverse and adverse action programs) in a single guide or publication.
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