Starbucks hit with multiple FCRA lawsuits after failing to follow adverse action requirements

While most people are talking about a Starbucks cup left in a recent Game of Thrones scene, business owners should be more concerned with the FCRA violations Starbucks is finding itself left with in an upcoming class action lawsuit.

According to National Law Review the coffee giant is finding itself facing a class action lawsuit after two pending cases alleging violations of the Fair Credit Reporting Act. These cases both allege the company relied on incorrect background check reports to deny employment, without giving the candidates the ability to correct the reports.  

As our compliance page details, background check information is collected using name and birth dates, that information needs to be matched at the county clerk level to confirm the information is correct. If a potential hire may not be offered a position based on the background check report, the employer must follow the procedures for Adverse Action.

According to the Daily Report at Law.Com both cases allege Starbucks did not follow the Adverse Action procedures. In one case started by Jonathan Rosario in Colorado the background screening company “Accurate Background” found multiple felonies on the plaintiff’s record. However, they had been a victim of identity theft and their adoptive brother had committed those crimes. Rosario said Starbucks did not reverse the adverse action after Rosario convinced Accurate Background those crimes were not his record.

A case started in Georgia by Kevin Wills complained that he was tentatively approved for a position when report from Accurate Background returned a record for a Kevin Willis from Minnesota who had been convicted of domestic violence. The plaintiff Wills tried to explain that he never lived in Minnesota, and that his last name was Wills, not Willis but he was denied employment. In addition, Starbucks did not provide him with a copy of his background check, a requirement under Adverse Action and the FCRA.

We can’t say for sure how this will turn out for Starbucks, but it’s likely they will settle. These two cases show that court records are not always perfect. That’s why it’s important to follow the FCRA guidelines for adverse action and ensure you give a potential candidate time to dispute the report. By not following the guidelines you open yourself up to potential court fees, or even worse FCRA fines.

HireSafe offers complete FCRA compliance with the ability to send adverse action notices directly from our web portal. If it turns out the records are correct, and your company decides not to hire, our web portal goes a step further to include adverse action reasoning in the final action page.