The lawsuit claims that Target violated a federal law, the Fair Credit Reporting Act (FCRA), which sets forth the procedure that employers must follow when they obtain and use background checks to make employment decisions.
The FCRA requires employers to disclose that they intend to conduct a background check for employment purposes and to obtain an individual’s permission beforehand. The FCRA also requires that the disclosure be in a separate document with no language other than the disclosure itself and the authorization. This lawsuit alleges that Target provided a disclosure that contained additional, extraneous language beyond the disclosure and the authorization.
The FCRA also requires that employers provide adequate notice to a job applicant before taking an adverse action, such as not hiring the job applicant, because of the information in a background check. This lawsuit alleges that Target did not provide adequate notice to job applicants before taking an adverse action.
The lawsuit and Settlement affect two Classes of individuals: those on whom Target obtained a background check based on the challenged disclosure form alone, and those who were not employed, promoted, or transferred as a result of the background check report.
Members of Class One are all internal and external applicants for employment, transfer, or promotion on whom Target obtained a background check report for employment purposes beginning November 13, 2010, through November 13, 2016, who executed the Consent & Disclosure Form available here or a form substantially similar.
Members of Class Two include all internal and external applicants for employment, promotion, or transfer on whom Target obtained a background check report for employment purposes beginning March 17, 2012, through June 13, 2016, who were not employed, promoted, or transferred by Target because of the background check report.
Target has agreed to establish a Settlement Fund of $8.5 million to provide for individual monetary payments to members of Class Two. Class Members of Class One only are not eligible for a payment from the Settlement Fund.
A portion of the Settlement Fund will be divided and paid out in checks of about $70 to each member of Class Two who does not opt out of the settlement. Class Two members do not need to do anything to receive that payment. Additionally, the Settlement Fund will make an additional payment of up to $1,500 to any Class Two member who submits a Claim Form stating that s/he suffered actual harm as a result of Target’s alleged violation of the FCRA’s requirement that an employer provide adequate notice before taking an adverse action based on the results of a background check.
Class Members have two options. They must decide at this stage whether they want to (A) do nothing, and allow the Settlement to proceed; or (B) object to the Settlement. Members of Class One only, do not have the option to “opt out” or exclude themselves from the Settlement.
A final fairness hearing will be held before the Court in December, 2017.