As I predicted in December, FCRA class action lawsuits are continuing as we enter the new year. It took only 7 days into 2015 for an FCRA Class Action complaint to be filed – this time, the targeted company is Paramount Pictures Corporation.

On January 7, 2015, the Dion-Kindem Law Firm filed a class action complaint and demand for a jury trial, on behalf of plaintiff, Michael Peikoff. This proposed class action lawsuit alleges that Paramount Pictures Corporation violated the FCRA (Fair Credit Reporting Act – the federal law that regulates employee background checks, and which imposes very specific disclosure requirements upon employers).

This class action complaint states that Paramount Pictures violated Section 1681b(b) of the FCRA by failing to make proper disclosures as required by this law. Specifically it alleges that Paramount Pictures included the “FCRA Employee Disclosure and Authorization form” in its regular employment application, and that Paramount also included a general release of liability in this language. The FCRA is clear that the “FCRA employee consent form” must be a separate and distinct document consisting solely of the background check disclosure. Thus, the class action complaint raises at least two issues, i.e., the “FCRA employee consent form” (1) not being a separate and distinct form, and (2) containing superfluous language not related to the background check disclosure and authorization, i.e., the general release of liability.

This FCRA complaint states that Paramount Pictures is liable for statutory damages of up to $1,000 per violation, punitive damages, and attorney’s fees and costs. Further, the complaint states that the number of members of the proposed class is in excess of 500 individuals, which if true, could result in statutory damages alone in excess of $500,000.

This FCRA class action complaint highlights again why every company should review their employee screening disclosures and procedures, sooner than later. Companies should seek out a reputable and reliable background screening company that can help explain and provide the specific FCRA-mandated employer disclosure forms that employers must provide. Remember the FCRA not only stipulates the format of the initial required disclosure, but it also specifies the content of subsequent required disclosures, should an adverse action be taken against the employee applicant, based upon the results of the background check report.

Posted by: Rudy Troisi. President, Reliable Background Screening.