On September 15, the United States District Court for the Middle District of Florida preliminarily approved a Fair Credit Reporting Act background check class action settlement in Speer v. Whole Foods Market Group, Inc. We previously wrote about this lawsuit on the Consumer Financial Services Law Monitor blog here. The settlement adds Whole Foods to the list of businesses that have paid hundreds of thousands to millions of dollars to settle FCRA claims related to their employment background check processes, often based on very technical theories of liability.
In December 2014, the named plaintiff filed a class action lawsuit against Whole Foods, alleging the disclosure it used to inform applicants it would obtain a background check included extraneous language. According to the parties’ motion for preliminary approval, Whole Foods will pay approximately $800,000 to settle the lawsuit. The settlement payment will be distributed to approximately 20,000 class members, resulting in gross payments of $40 to each class member ($24 net). The named plaintiff will receive $2,500, and the plaintiff’s counsel will seek one third of the settlement fund for attorneys’ fees.
The Whole Foods settlement serves as another reminder for businesses to verify that their background check disclosure is compliant with FCRA requirements. In Speer, the plaintiff alleged the disclosure at issue violated the FCRA because it allegedly included a liability waiver. This theory of liability has been a popular subject of litigation for plaintiffs’ counsel in the past several years, with courts deciding the issue both ways. As employers have begun to remove liability releases in recent years, plaintiffs’ counsel have grown more creative in their theories. Recently, plaintiffs’ counsel have focused on the presentation of the disclosure, the number of pages comprising the disclosure, and the inclusion of state law notices.