Lawyers Chomp on Chuck E. Cheese’s Class Action FCRA Lawsuit

What happens when you bundle a background check consent form with other application documents?

You break the law.

In the case of Chuck E. Cheese’s parent company, CEC Entertainment, you also get caught and sued for violating the Fair Credit Reporting Act.

This JDSupra article reports that CEC Entertainment recently agreed to pay $1.75M to settle a class action lawsuit in which Chuck E. Cheese’s applicants said the company didn’t comply with federal background check law during the hiring process. The applicants said the company violated the FCRA by incorporating a background check consent form with other application materials and did not provide the required checkbox for an applicant to request and receive a copy of their background check results. In California, where this lawsuit was filed, the checkbox is required under state law.

 According to FCRA law, a background check consent form must be a separate, stand-alone pre-authorization form that has no extraneous wording and is not combined with other application materials. Here’s what else a disclosure form needs to have:

• It’s written

• It’s asked for on a form separate from any other forms related to the candidate’s application for the job

• It’s required if you will hire an outside agency (like Active Screening) to check out a candidate

• Consent often includes the right to inquire about a candidate’s credit report (but this should be specifically stated)

• There can be no waivers, additional wording, or other extra information on the form that can be confusing to applicants

• The disclosure must provide specific information about the person’s rights to obtain information regarding the investigative report, including that they can view the file maintained by the consumer reporting agency, obtain a copy of the file by mail or in person, or obtain a summary of the report over the telephone.

• It’s required to obtain extra information like school transcripts or military service records

An applicant does NOT have to consent to a background check. You are entitled to take them out of consideration if they do not consent.

NAPBS-accredited-NewsAs a nationally-accredited screening agency, Active Screening is always at the forefront of compliance issues and we stay ahead of the curve with our compliance forms. It’s important that our clients not only have access to these forms, but that our website visitors and potential customers have an opportunity to see what legal consent forms looks like. We believe in the necessity of background checks as a hiring tool, and we want to ensure employers and employees alike are educated about their necessity when they are in full compliance with the law.

We have made our consent form templates completely transparent and available on our website. The template we offer is in full compliance with federal and state laws. It has been vetted by our FCRA attorney who is a veteran in the industry. If you want to take a look for yourself, click here. There’s even some state specific forms for California and New York who have additional compliance laws employers and CRAs need to follow.

Here’s the kicker with the Chuck E. Cheese’s case though. As JDSupra.com writes: “The kid-friendly restaurant chain will pay approximately 28,500 job seekers about $38 each with their attorneys pocketing up to $577,000.”

Yup – it’s the attorneys who are walking away with plenty of dough. These guys and gals know what they’re doing and they know
 that class action lawsuits are big time money and name makers. They’re also wise to the fact that employment law changes so frequently that employers may not have the time to keep up. That translates into big money lawsuits. This post claims that a successful FCRA claim can net between $100 – $1000 per violation. One way to stay ahead of attorneys is to always work with an accredited background screening agency who understands the rules, regulations and roles in compliance when working as a Credit Reporting Agency, like Active Screening.

Have questions about FCRA compliance? We’ve got answers. Shoot us a comment below or contact us here.

This entry was posted in Background Screening, Criminal Records, General, Human Resources, Industry Solutions, News, References & Credentialing and tagged , , , , , , , , , , , , , , , , , by Patricia Carlson. Bookmark the permalink.

Patricia Carlson is a content writer who specializes in B2C and B2B inbound marketing. She blogs regularly for clients about the background screening and finance industries, and generates newsletters, white papers and email campaigns for a variety of businesses. Patricia also produces a heavy rotation of editorial material for home design, law enforcement, and family magazines. She’s been writing professionally for more than a dozen years, and for Active Screening for more than two of those. Check out LinkedIn for a roster of Patricia’s clients and links to published works. When she’s not interviewing sources or researching trends, she’s living a fast-paced Florida life questioning the antics of her two young children, partner and mischievous cat. Patricia loves to talk tennis and TV on Twitter – give her a shout @pattycfreelance.

 
        
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