On May 23, a California federal judge issued a written tentative ruling indicating that she would likely approve AutoZone, Inc.’s agreement to pay $5.7 million to settle claims that the company illegally ran credit checks on 200,000 prospective employees.
In September 2014, two individuals filed suit on behalf of a class against AutoZone in the U.S. District Court for the Central District of California. The suit alleges that AutoZone was routinely running background checks on prospective employees without complying with applicable law. Plaintiffs assert that under the Fair Credit Reporting Act and California statutes, an employer may not obtain a background report on a job applicant unless a “clear and conspicuous” disclosure is made in a stand-alone document, often referred to as a pre-authorization form. In this case, a pre-authorization form was embedded as a window within a multi-page online employment application that contained unrelated provisions and failed to provide required disclosures regarding the procurement of background reports. Therefore, according to plaintiffs, AutoZone failed to properly disclose to potential hires that it was running background checks on them, thereby violating state law and the FCRA.
The auto parts retailer has proposed payment of the $5.7 million settlement amount in the form of $20 in cash or $40 in gift cards to class members. Judge Phillips indicated during the May 23, 2016 hearing that the parties should submit a proposed settlement order with a revised class notice period and she would “probably approve it.”
The case is Antonio Aceves Jr. et al. v. Autozone Inc., No. 5:14-cv-2032.