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On January 25, 2013, Kmart agreed to a $3 million settlement stemming from allegations that it violated the Fair Credit Reporting Act (FCRA) when using background checks to make employment decisions.
In the case, Pitt v. Kmart Corp., the lead plaintiff claimed that the statement of rights he received did not adequately inform him of his rights under the FCRA. Apparently, Kmart used an outdated 1997 form which did not include correct contact information for the FTC and did not include the fact that consumers have the right to dispute incomplete and inaccurate information.
The plaintiff also claimed that the misdemeanor convictions from 2002 included on the background report took place prior to the time frame listed on the employment application which indicated it would report convictions from the preceding seven years only.
While Kmart denied any wrongdoing, they agreed to settle the class action suit that included nearly 65,000 individuals who received a statement of consumer rights following a background check conducted for Kmart employment purposes.
For more information, contact Alliance Risk Group.