Background Check Class Action Underscores Need for Prior Authorization

Be careful when doing background checks on applicants and employees!  The Fair Credit Reporting Act (FCRA) establishes a series of hoops through which employers must jump when using a third-party vendor to do most background checks.  Fail to jump through the right hoops at the right time and you could be facing a lawsuit.

Just ask hotel operator ESA Management LLC, the company that operates Extended Stay America Hotels.  ESA was recently served with a class action lawsuit alleging the company violated the FCRA by failing to properly inform thousands of job applicants of background checks.

Most vendors provide authorization forms for your use, but remember that the vendor is most worried about liability to the vendor.  If you have any concerns or want to make sure you are doing the background check the correct way, ask your lawyer.

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