Washington, DC: A $3m settlement has been reached in the employment class action pending against retailer Kmart. The lawsuit alleges that Kmart violated the Fair Credit Reporting Act (FCRA) by failing to notify job applicants if they were rejected because of a failed background check.
The class includes some 64,50 plaintiffs, all of whom allege they were given insufficient opportunity to dispute negative background reports, when applying for employment at Kmart. The FCRA stipulates that employers must notify applicants if they plan to take an “adverse action,” such as denying employment, based on a credit report or criminal background check. In the employment lawsuit against Kmart, the plaintiffs allege they were rejected as job applicants before Kmart alerted them of red-flagged reports. “Defendants knew or should have known about their legal obligations under the FCRA. These obligations are well-established in the plain language of the FCRA and in the promulgations of the Federal Trade Commission,” the lawsuit states.
The settlement will end the lawsuit entitled Pitt v. K-Mart Corp., Case No. 11-cv-00697, U.S. District Court for the Eastern District of Virginia.
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