Home > Uncategorized > Can an FCRA disclosure statement include a release? Probably not.

Can an FCRA disclosure statement include a release? Probably not.

December 21, 2012

Earlier this year, the District of Maryland issued an interesting opinion in Singleton v. Domino’s Pizza, LLC, Civil Action No. DKC 11-1823, 2012 WL 245965 (D. Md. Jan. 25, 2012).  Plaintiff Singleton represented a class of Domino’s employees who had agreed, by signing standard forms supplied by Domino’s, to allow Domino’s to check their criminal background as a condition of employment.  The class alleged that Domino’s standard form violated the FCRA; Domino’s moved to dismiss; and the court ruled for the class.  Here’s what happened:

The FCRA states at 15 U.S.C. Sec. 1681b(b)(2)(A)(i) that before an employer conducts a background check, the would-be employee must be given and a disclosure form which notifies them “in a document that consists solely of the disclosure,” that the employer may or will be running a background check.

Domino’s asked employees to sign standard forms which stated that they knew Domino’s would be running a background check, were allowing Domino’s to do it, and were waiving any right they had to sue Domino’s or the background checker over the results.

The class action alleged that Domino’s “willfully” violated the FCRA at 15 U.S.C. Sec. 1681b(b)(2)(A)(i) because:  1) the law requires the disclosure document to consist “solely” of the disclosure; but 2) Domino’s threw in a release of liability as well.

Domino’s moved to dismiss the claim on several grounds, the most interesting of which (to me) is that the class action complaint did not provide enough detail to support its claim that Domino’s willfully violated the law.  As background, this class action will be a headache for Domino’s if and only if Domino’s “willfully” violated the law.  If the violation was negligent, the class would only get actual damages, which would likely be little or nothing.  If the violation was “willful,” then the class could get $100 to $1,000 per violation – which given the number of Domino’s employees could be a pretty hefty sum.

The court essentially refused to dismiss the claim, on the grounds that the FCRA provision is pretty obvious – “solely” means what it says – such that the plaintiff class did enough by pointing to the disclosure form’s extra language and claiming that Domino’s must have put it there willfully.

In short, the court held that no, FCRA disclosure statements cannot include releases, or for that matter anything else:  they must “solely” consist of a release and nothing else.

A question that I would have liked to see the court address:  did the class members actually release Domino’s and/or the background checkers from liability through the release that was in the disclosure form.  In other words, even if the release shouldn’t have been where it was in the paperwork, was it effective?  Can a person release a corporation from liability under the FCRA?  Domino’s didn’t ask, so the court didn’t say.

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Categories: Uncategorized
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