Faulty Background Checks Prompt Multiple Class Action Lawsuits

Last March Michele Petry was told she would not be hired for a nursing position she had so eagerly awaited for. Indianapolis-based IDE Management had run a mandatory background check which had revealed Miss Petry was a convicted felon. Her crimes against her included a felony conviction for drug paraphernalia and another for theft.

The Booneville resident didn’t actually have a felony record; in fact her record was sparkling and clean. After being told she would not be hired for the position, she asked the prospective employer to view the results of the background check to which she was denied in doing so. It was this action that led Miss Petry to file a class action lawsuit against IDE Management in the U.S. District Court for the Southern District of Indiana, Evansville Division.

Miss Petry claims the employer, who operates under the business name of Cathedral Health Care Centers, refused her a position based on inaccurate results of a background check. They also denied showing her the results and further refused to give her a chance at rectifying the situation. This violated the required provision of the Fair Credit Reporting Act which governs all U.S. based background checks.

According to a survey conducted by the Society for Human Resource Management, up to 93% of employers conduct a criminal background check on prospective employees. The research further indicates that the companies performing these checks regularly mismatch people, omit important information, reveal sealed information, or make errors in relation to criminal offenses.

As a part of her claim, Miss Petry has stated that IDE Management willfully and negligently violated the Fair Credit Reporting Act immediately after they failed to provide her with a copy of the background check report and a written description of her rights as clearly stated in the Fair Credit Reporting Act.

By government regulations, The Federal Trade Commission and the Consumer Financial Protection Bureau (CFPB) are required to ensure reporting companies such as IDE Management adhere to the Fair Credit Reporting Act. Furthermore any report drawn from public records must notify the people named in the report within 30 days so they have the opportunity to challenge any inaccurate data. When erroneous checks are made, the CFPB can fine these agencies.

Unfortunately, Miss Petry is not the only person who has experienced the inability to get hired due to a faulty background check. In 2015, the CFPB fined General Information Services and its affiliate, e-Background-checks.com Inc. for $2.5 million dollars after they included outdated civil suit and civil judgment information in reports that were provided to prospective employers. The agency was ordered to pay a further $10.5 million in damages to the victims who’s, as the CFPB described, employment eligibility and reputation had been tarnished. Earlier this year, Starbucks Corp. was also brought a class action lawsuit by a Colorado man who says he was denied employment because of inaccurate reporting.

Currently, states are working hard to find ways to prevent inaccurate background checks. For instance in California, the Fair Employment and Housing Council finalized regulations that limit state employers’ ability to use criminal history in their employment decisions. These regulations take effect July 1, 2017 and prohibit an employer from discriminating against a person based upon their criminal history.

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