Pepsi Beverage Company recently agreed to pay over $1 million to settle a class action lawsuit against the beverage giant alleging it violated the Fair Credit Reporting Act (“FCRA”) by failing to conduct compliant employment background checks.
Accessed Credit Files Without Consent of Applicants
Specifically, sometime in or around September of 2015, a class action lawsuit alleged that during the job application process with PepsiCo, it accessed the credit files of its job applicants without making the proper disclosures and adhering to the requirements of the FCRA. Under the Fair Credit Reporting Act, if an employer intends to access any type of credit or background report on an applicant, it must receive express written consent from that person. The employer must provide the potential employee with its request to access his or her credit file in a stand alone document so that there is no confusion regarding how the employer intends to use the information contained in the report.
Protections Under the FCRA
The FCRA was designed to regulate how private personal information is disseminated and used. First the FCRA has a notice requirement prior to accessing a consumer report. Subsequently, should a company desire to take adverse action based on the information contained in the report, it must put the consumer on notice and provide it with a copy of the report and a summary of rights under the FCRA. As in the case with PepsiCo, when the employer fails to provide the employee with an initial disclosure that a credit check may be done, the employee has no way of knowing that his or her report was used during the hiring process and has no opportunity to correct any errors that may be included in the report.
According to the unnamed class members, PepsiCo should have known and adhered to its obligations under the FCRA. Under the FCRA, violations may result in a fine up to $1,000 per violation and reasonable attorneys’ fees.
If you believe your rights have been violated under the FCRA and would like the advice or assistance of counsel, contact SmithMarco, P.C. for a completely free case review.
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