Uber Suit Highlights Risk of Pre-Employment Background Checks
The number of lawsuits against Uber, Inc. appears to be growing almost as quickly as the company’s app-based car service. The latest lawsuit involves the company’s use of pre-employment background checks.
The proposed class-action suit, which was filed in New Jersey federal court, alleges that Uber violated the Fair Credit Reporting Act (FCRA) by denying applicants the opportunity to dispute the information contained in the reports of their pre-employment background checks. The company is facing similar suits in California.
Cuccinello v. Uber
According to the complaint in Cuccinello v. Uber, Uber contracted with consumer reporting agency Hirease Inc. to obtain background reports on prospective drivers in order to conduct thorough pre-employment background checks. The plaintiffs, Joseph Cuccinello and James Brooks, allege that they were denied employment based on the content of their reports, but were never provided with copies of the reports or given the opportunity to dispute information contained in their criminal, financial and employment histories. The suit further alleges that the online forms in which they consented to the background checks “unlawfully attempted to obtain future protection for defendants for any unlawful actions, and included other limitations on consumer protections and other extraneous language.”
FCRA vs. Businesses
As we have discussed in prior posts, the FCRA has consistently been a litigation trap for unwary businesses. The federal statute imposes several requirements on employers who wish to conduct pre-employment background checks on job applicants, such as obtaining credit reports and criminal records.
Among other legal requirements under the FCRA, employers must notify applicants that they might use information in their consumer report for decisions related to their employment and obtain written authorization to obtain the reports. This written disclosure must be in a stand-alone format separate from the job application and not contain any other content, although it may be contained with the authorization.
Prior to rejecting a job application (or taking any other adverse employment action) based on information found in these pre-employment background checks, employers must give the applicant or employee a notice that includes a copy of the consumer report the employer relied on to make the decision, as well as a copy of A Summary of Your Rights Under the Fair Credit Reporting Act.
As highlighted by the Uber suit, the failure to take the above compliance steps can result in a costly lawsuit. The FCRA authorizes statutory damages of up to $1,000 per class member as well as punitive damages, actual damages and attorney’s fees. Accordingly, it is wise to review your FCRA compliance, particularly with respect to online applications.
Breach of Contract Explained: Types and Consequences
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Gross Lease vs. Net Lease: Understanding the Key Differences
Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]
What to Do If You Are Impacted by a Retailer Bankruptcy Part 2
Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]
The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business
Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]
Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1
The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
