Car Sharing Services Accused of Violating FCRA

Uber is fast becoming a background check blogger’s dream to write about. That’s because the ride sharing company keeps finding itself embroiled in lawsuits, battling with municipalities (domestic and abroad), and handling dangerous accusations.

We previously covered Uber’s contentious disagreement with city officials in Houston, Texas who are trying to compel the company to conduct more stringent background checks on its drivers.

  Uber certainly isn’t the only ride-sharing service to come under fire. Lyft is right there with them. These “transportation networks,” both of which are based in San Francisco, are being accused of violating the most important federal background check law in existence – the Fair Credit Reporting Act. Or ‘FCRA’ as screening industry and employment insiders refer to it.


Let’s let the International Business Times (IBT) lay the groundwork:

“Lawyers for Uber and Lyft might be sharing a ride to the same courtroom. The rival car-hailing firms, both based in San Francisco, are being sued by the same driver, who is accusing them of illegally obtaining credit reports and background checks while failing to follow proper disclosure and authorization procedures.”


Here’s the Catch

It gets really interesting when you dissect the next paragraph:

“In two nearly identical legal complaints filed [earlier this week], Michael Nokchan, who worked as a driver for Uber Technologies Inc. and Lyft Inc., said the alleged violations took place after he applied for jobs with the firms. In the complaints, Nokchan admitted he signed a document authorizing the companies to obtain background checks, but he said the authorizations were unclear and buried with other extraneous information.”


Lyft has gone on record saying the lawsuit is “without merit.” Uber hasn’t responded to the accusation.

 Keep It Simple

Why is this such a big deal, you ask? Because for most applicants, the legalese used in hiring documents is confusing enough. When you add confusing screening lingo to the piles of paper most firms use in their hiring process, candidates may not understand what they’re getting into, how their personal identifying information is being protected, and how their background check results may or may not be used against them in the decision making process. “Under the Fair Credit Reporting Act, it’s illegal for companies to obtain background checks on prospective employees unless a clear disclosure is made in a stand-alone document,” reports the IBT.

In other words, FCRA protects candidates and the information that is sourced about them, from being used in illegal, discriminatory practices and it ensures that candidates know and understand this by allowing them to read about – and sign off on – a background check on a form that doesn’t talk about anything else.

Who’s Watching?

The U.S. Federal Trade Commission (FTC) and the U.S. Equal Employment Opportunity Commission (EEOC) are the two federal arms that watch over employment law, and they are becoming increasingly watchful over the screening industry and enforcing alleged FCRA violations. Check out these posts for reference:

Big name companies like Hertz, Whole Foods, and Home Depot have all been hauled into court accused of violating some portion of FCRA law. This is Uber’s second time being sued for background check issues. The first time was in November by a driver who said he was fired because of information found on his background check but wasn’t given the chance to defend or explain the information. FCRA law states that prospective employees be allowed to contest any information returned in their screening report if it used against them in the hiring process.

What Can Employers Do?

We have lots of great information about staying within the confines of FCRA law on our ActiveCare blog. We encourage you to read up when you have a moment or spread the word by sharing our posts with co-workers or on Facebook or Twitter. Part of our mission at Active Screening is to empower people with knowledge about background check process and the laws in place to protect both employees and employers. Please post any questions or comments you have below!

This entry was posted in Background Screening, General, News 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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