On November 13, a New York federal judge granted final approval to a $4.75 million settlement between background check company Sterling Infosystems, Inc. and a class of Dish Network, LLC satellite television installers.

The installers brought claims against Sterling for violations of the Fair Credit Reporting Act (“FCRA”) including that Sterling provided outdated information to their employers and that Sterling did not have a permissible purpose to issue the consumer reports.  The settlement also includes a claim that Sterling failed to provide class members with copies of the reports after being requested to do so.

The suit also included claims against Dish Network, LLC (“Dish”).  Dish uses a network of independent contractors (the Dish Network Contractor Program) for its installation services.  Businesses who are part of the Dish Network Contractor Program hire individual technicians to perform the installation services.  The settlement does not include Dish, which still faces various claims brought by installers alleging that it violated the FCRA, including failure to obtain necessary permission to obtain the reports provided by Sterling, failure to make proper notifications before obtaining the reports, and failure to provide the class members with copies of reports before taking adverse actions against them.

Class representative Scott Ernst filed the original complaint in December 2012, alleging that Dish failed to obtain his authorization and never informed him and other installers about the consumer report information being used, thus denying them a chance to correct any errors in the reports.  Ernst alleged that Sterling reported outdated information, including charges and citations that never led to criminal convictions despite the FCRA preventing the inclusion of any adverse data other than conviction records that occurred more than seven years prior to the report being provided.

According to the Complaint, as a result of the information in the report, Ernst was banned from performing work on Dish projects.

The final settlement includes three classes: (1) the Criminal Record Settlement Class – those whose reports included information on criminal counts that were more than seven years old that did not result in convictions; (2) the Motor Vehicle Record (MVR) Settlement Class – those whose reports included motor vehicle records that were more than seven years old; and (3) the DISH Contractor Settlement Class – those who were the subject of reports issued by Sterling to contractors working with Dish.

Class counsel will receive $1.28 million in fees and costs, the settlement administrator will receive up to $270,319 in fees and costs, and Ernst will receive a $5,000 service award.  Based on the October 2015 settlement memoranda, it is estimated that members of the Criminal Record Settlement Class each will receive $47, members of the MVR Settlement Class will receive $61, and members of the DISH Contractor Settlement Class will receive $42.