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KISS: When it Comes to Disclosures

 

As a young US Army Lieutenant, I was taught the ‘KISS’ (keep it simple stupid) method of planning.  As General George Patton has been quoted, “A good plan today is better than a great plan tomorrow.” 

KISS came to mind at last March’s National Association of Professional Background Screeners (NAPBS) convention in Washington DC, where all of the speakers seemed to have the title “Esq.” after their names (lol).  There was much discussion about “Serial Plaintiffs” who apply for a multitude of positions, not with the intent of getting a job, but with the sole purpose of finding flaws in the employer’s Fair Credit Reporting Act (FCRA) compliance to extract a monetary payment from the employer ( http://www.business2community.com/human-resources/serial-plaintiff-uses-fcra-threaten-employers-earns-230000-settlements-01589506#vwSX7ubsbSRIJ4BC.97).  These professional plaintiffs have managed to extort millions of dollars from potential employers because it is cheaper and minimizes the risk of negative publicity to make out of court settlements, rather than to fight the case in court.

The speakers at the NAPBS conference recommended making the FCRA Disclosures, also known as an Applicant Release or Authorization, “short, sweet and pristine.”  To mediate risk, it should just be 3 or 4 sentences. Please do not take this as legal advice; I am simply suggesting a course of action that may prevent costly litigation from serial plaintiffs. Your own attorney would be your best course to address issues related to FCRA matters. If you wish to see a sample Disclosure, visit www.pre-check.com > Resources. 

Be sure that your Disclosure does not have any extraneous statements that should not be there.  Absolutely remove any indemnifications or language that claims to release you from liability.  Do not require certifications on the job seekers that all information is accurate.  Delete any wording that would require the applicant to acknowledge that the employers’ hiring decisions are based on legitimate non-discriminatory reasons.  Get rid of broad authorizations that would permit the release of information that the FCRA does not allow, i.e. arrest records that go beyond 7 years.

The idea is to KISS, because extraneous information makes it harder for the prospective job seeker to understand what the Disclosure is all about. It also may violate the FCRA. So, be careful not to add other acknowledgements or waivers of liability beyond what the FCRA permits.  Use separate documents to list additional releases, disclosures or authorizations.

My hope is that this information will lead the reader to review their employment forms and disclosures with their respective attorneys.  The cost of litigating serial plaintiffs can run into the hundreds of thousands of dollars, and that is even if you do manage to win.

Robert Drusendahl, has been the owner of The Pre-Check Company for 25 years. He has been a nationally published source for background screening for several years. 

 

 

 

Employers, beware — hire this guy and you’ll probably wind up getting sued.

A Bronx man who has worked for 11 companies since 2007 has filed suit against every single one, court records show.

Marshall Maor, 33, even sued the same employer twice — refiling an identical complaint shortly before a judge tossed out the first one because it was served on the defendant too late.

Ten of Maor’s 12 suits have been filed since 2014, with two docketed on the same day — Jan. 20, 2014 — and another pair dated back-to-back on April 2 and April 3 of 2015.

And while he brought most of his suits years after he stopped working for the employers, his most recent — filed Jan. 5 of this year — says he had worked for defendant Casa Mia Manor House “from approximately July 2015 through the present.”

“He seems to be a professional plaintiff,” said a lawyer who is representing one of Maor’s targets. “Suing people is his vocation.”

Almost all of Maor’s suits involve allegations that he was cheated out of his share of the tips tacked onto the cost of catered events where he worked as a waiter or server.

But in one case, against the All Team Staffing employment agency, Maor charged the company with illegally deducting $30 from his wages to pay for a background-check investigation.

Maor claims to have worked for one employer over a period of three years, but his tenure with others has been as short as one month, court records show.

Defendants in his cases include some of the city’s best-known restaurants, such as the Russian Tea Room and several eateries currently or formerly run by the Cipriani family.

Maor has also sued hotels in Westchester County, a Rockland County country club, a yacht-charter company that runs cruises up and down the Hudson River and a firm that has catered events at the Javits Center.

Maor’s suits have all been filed as class actions in which he sought damages on behalf of himself and up to 450-plus co-workers at a time.

Several cases were settled under confidentiality agreements, but one — against the Crowne Plaza White Plains hotel — resulted in a deal to pay out as much as $990,000 to waiters, bussers, bartenders and others who worked events there between Jan. 1, 2008, and Nov. 10, 2015.

That deal also included up to $400,000 in legal fees and expenses to lawyers at Leeds Brown Law and Virginia & Ambinder.

The two firms have handled nine of Maor’s 12 suits, with Leed Brown handling a 10th alone. Maor has also been represented by the firms Fitapelli & Schaffer and Outten & Golden.

“He’s not a plant by any stretch of the word,” said Maor lawyer Lloyd Ambinder. “He’s an individual who gets assigned by staffing agencies. We’re happy to represent him as long as he has a bona fide claim.”

 

Big Lots. Accused of running background checks on applicants and employees without their knowledge or consent.

Chipotle. Accused of burying their disclosure and authorization in bulky applications. 

Whole Foods. Settles after being accused of unlawfully including a release of liability in their disclosure forms.

These are just three of the latest class action lawsuits accusing huge employers of violating the Fair Credit Reporting Act.

Mary Poquette// Owner & Principal, Poquette Screening Solutions

One of the reasons for the ground swell, I believe, is simply because there is a lot of money to be made. There was one that settled for example for $1.75 million and each of the members of the class is going to get a check for $38 and the attorney is going to get over $500,000. So it certainly appears to be a very lucrative business.

Montserrat C. Miller// Partner, Arnal Golden Gregory 

We have a very aggressive plaintiff’s bar. We see a lot of litigation. Some of it is well thought out, some of it is not.

The thing these three cases have in common is that they all revolve around issues with the employer’s disclosure and authorization forms. The rules, as the forms go, are pretty straight forward. Under the FCRA, an employer MUST clearly disclose to an applicant or employee that a background check is going to be performed. Then, they must obtain written permission from the individual to conduct a background check. 

Pamela Q. Devata// Partner, Seyfarth Shaw

Anything that is not a very specific, short pithy disclosure and an authorization just for a background check could be challenged. 

Some of the mistakes employers are making are pretty benign, like including a link to their company benefits. Others have been more egregious like including a waiver of liability. Whatever it is, if the disclosure includes anything extra, your company could become a target. This relatively new environment is leading many companies to take a long hard look at their documents.

Pamela Q. Devata// Partner, Seyfarth Shaw

For years, many many companies had a one size disclosure form that had a disclosure at the top and an authorization at the bottom. And frankly, we think that is absolutely legal; however, right now companies are wise to mitigate their risk and consider separating those documents.

All three of the experts we spoke with say it is clear that the plaintiff’s bar is seeking these cases out. They are described as cookie cutter. Almost all of the class action cases point out the same deficiencies. Right now the main targets are the huge employers, but once those big fish are caught, the attention will undoubtedly drop down to the next tier. 

Montserrat C. Miller// Partner, Arnal Golden Gregory 

It’s like shooting fish in a barrel! Terrible expression, but it’s the lowest hanging fruit.

And if your company turns out to be that low hanging fruit, it is going to cost you.

Montserrat C. Miller// Partner, Arnal Golden Gregory 

Because you just have to understand what your requirements are, otherwise you are going to get litigation.

Pamela Q. Devata// Partner, Seyfarth Shaw

As everyone knows, once you are sued, you lose because you have to pay legal fees to go ahead and defend that.

 And those fees can add up quickly. Your best bet: review everything with your legal counsel so you're as protected as possible.

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Posted by Robert Drusendahl in General

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