For the second time in a year, Amazon has been hit with a Fair Credit Reporting Act (FCRA) violation claim based on its hiring process. This week, a New Jersey man sued Amazon in federal court for denying him a job in reliance on a background report without warning him or providing him with an opportunity to correct the record. According to the compliant, Amazon made a contingent offer of employment to the man following an in-person interview, which he accepted. Amazon allegedly withdrew the offer of employment at its New Jersey facility based on information obtained in a standardized background report conducted by a third-party company, without warning the man or providing him a copy of the report or the opportunity to dispute the results, all violations of the Fair Credit Reporting Act’s mandatory pre-adverse action notification requirement.
The FCRA permits employers to conduct background checks, which can include credit checks and criminal history. However, under the FCRA, any company intending to take an adverse employment action based in whole or in part on information obtained from the consumer report must provide notice of that fact to the consumer, and must include with the notice a copy of the consumer report and a notice of the consumer’s rights to dispute the information contained within the report, prior to taking the adverse action.
The case against Amazon is a great reminder that although conducting background checks can be a best practice, if it is done without appropriate planning and training, a pre-employment investigation can be a potential source of liability.