In 2015, a job applicant challenged Target Corporation’s disclosure form and filed a putative class action FCRA lawsuit known as Just v. Target Corporation, Case No. 15-cv-04117. This case claimed that Target Corporation’s addition of certain statements in their disclosure and authorization form are not factually related to the disclosure consent under the FCRA.

Employers are required to receive a signed disclosure from the subject of the report that authorizes the employer to conduct a background check as per the Fair Credit Reporting Act (FCRA). In order for the disclosure to be deemed compliant, it must contain certain language and also omit certain language. As a part of Target Corporation’s hiring requirements, their organization requires for applicants to complete said disclosure and authorization form. The form simply advises job seekers that Target Corporation will conduct an employment background check for suitability with the organization.

The job applicant argued that Target Corporation violated 15 U.S.C. 681b(b)(2)(A)(i), better recognized as the “standalone disclosure requirement.” The requirement states that the disclosure must be “in a document that consists solely of the disclosure.” The plaintiff did concede, however, that Target Corporation’s consent requirement in the Consent & Disclosure was compliant because it is expressly permitted by 15 U.S.C. 681b(b)(2)(A)(ii).

The Target Corporation’s disclosure form, however, allegedly included additional statements:

• A statement indicating that the applicant’s consent does not create a contract of employment
• Deadline to dispute inaccurate information
• A statement mentioning that dedication, trust, and honesty are required of all employees
• State-specific information on how to request a copy of the consumer report
• A statement clarifying that employment is at-will

Why This Case Was Dismissed

The Target Corporation argued to dismiss the case due to the state of the law. It was not objectively unreasonable to add additional statements although the consent and disclosure consisted of information that exceeded what was allowed by statute. Moreover, the court determined the motion based on a finding that there was no “willful” violation on behalf of Target Corporation. As a result of that, the case containing the class action FCRA lawsuit was dismissed.

Victory was awarded to the Target Corporation as they explained that the disclosure was not “objectively unreasonable” to include the additional language under the standard for willful violation of the FCRA (Safeco Ins. Co of Am. V Burr, 551 U.S.). The case was dismissed because the informal advisory opinions of the Federal Trade Commission did not prohibit the additional language.

Employers must also be aware that unlike other consumer data protection laws, there is no cap on damage from violations of the Fair Credit Reporting Act; therefore, the majority of class action lawsuit settlements are in the tens of millions of dollars. Furthermore, plaintiff’s attorney’s fees are included, which gives said attorneys an incentive for taking on cases having to do with the Fair Credit Reporting Act.

In conclusion, there are two steps that employers should take to avoid the type of liability that a class action FCRA lawsuit poses. First and foremost, employers should conduct a quarterly review of their background screening compliance forms. This includes authorization, notices, and any extra state/county specific notices. In addition to this, businesses must align themselves with an accredited nationwide background screening organization for compliant background screening services.