After facing speculation as to whether Uber sufficiently screens the backgrounds of its drivers, Uber is now facing a class action under the Fair Credit Reporting Act for allegedly failing to conduct background checks in accordance with the FCRA. This lawsuit provides another example of the minefield companies face when conducting pre-employment background checks.
According to the class action lawsuit filed in the Northern District of California, the plaintiff applied to drive for Uber using his own car. In connection with his application, Uber purportedly obtained an authorization from the plaintiff to procure a background check on him. After procuring the background check, Uber purportedly notified the plaintiff that he could not drive for Uber because of the results of that report. At the same time the plaintiff received this notice, Uber allegedly revoked his ability to access the Uber app as a driver.
Based on these allegations, the plaintiff claims that Uber failed to comply with two provisions of the FCRA. According to the plaintiff, prior to obtaining his background check, Uber failed to provide him with a valid disclosure that consisted solely of the disclosure that Uber would order a background check on him. The plaintiff also claims that Uber took adverse action against him based on his background check without providing him with the proper pre-adverse action disclosures, including a summary of rights under the FCRA and a copy of the applicant’s background report. The plaintiff seeks significant statutory damages for the alleged FCRA violations – up to $1,000 per class member.
This case presents another example of the significant compliance hurdles companies face when conducting pre-employment background checks. The failure to conduct a background check opens the door to potential claims for negligent hiring. If a company does conduct a background check, however, it must ensure it complies with the FCRA. Failure to do so could result in significant statutory damages, even in situations involving minimal actual harm to the plaintiff.