On April 9, the U.S. Judicial Panel on Multidistrict Litigation ordered that three putative nationwide class actions against Michaels Stores Inc. be centralized in New Jersey.  The actions accuse Michaels Stores of violating the Fair Credit Reporting Act (“FCRA”) by failing to properly notify job applicants that the company would access their credit reports.

Federal lawsuits are currently pending against Michaels Stores in New Jersey, Texas, and Missouri.  The U.S. Judicial Panel on Multidistrict Litigation said that the federal suits involve common questions over the arts and crafts retailer’s online job applications and that centralizing the cases for pretrial proceedings would be most convenient for the parties and witnesses and would “promote the just and efficient conduct of the litigation.”  The Panel noted that “[c]entralization will eliminate duplicative discovery on potentially complex factual inquiries such as the willfulness of defendant’s conduct; avoid inconsistent pretrial rulings, particularly on class certification; and conserve the resources of the parties, their counsel and the judiciary.”

The first-filed action is pending in New Jersey, the Panel noted, adding that the district represents “a readily accessible and convenient transferee forum.”

In the New Jersey action, plaintiffs allege that Michael Stores fails to provide a “stand alone” disclosure that it will obtain the consumer reports.  The lawsuit claims that Michaels Stores’ current disclosure is buried among blank spaces for the applicant to fill in his or her previous work experience, ten different state law notices relating to conviction record protection laws, and other statements and proposed agreements.  The same issue has been raised in the Texas and Missouri lawsuits.

The suit is one of a number of such recently-filed lawsuits alleging that companies have violated this provision of the FCRA.  For instance, as we previously reported, Whole Foods Market Group, Inc. also was recently hit with putative class actions for allegedly violating the FCRA.

Troutman Sanders LLP has extensive experience in FCRA litigation and compliance with respect to challenged disclosure forms.  This growing body of lawsuits challenging employer disclosure forms warrants careful review of such forms by companies.  Troutman Sanders will continue to monitor this area of law.