Know your credit report rights when applying for a job

Employers must tell you if they pull a credit report and base hiring decisions on it

By Elizabeth Ryan, Bailey & Glasser LLP’s Boston, Massachusetts office, and John Barrett, Bailey & Glasser LLP’s Charleston, West Virginia office

Have you applied for a job with a large retailer, restaurant, bank, hospital or other employer and been turned down? It’s possible that your federal rights have been violated.

The federal Fair Credit Reporting Act, or FCRA, requires employers to give notice and get authorization if they plan to check a job applicant’s credit report as part of the application process. This notice must be separate from the application and any other documents to help ensure the applicant notices the disclosure.

Before an employer rejects a job applicant based on negative information in a credit report, the employer must give the applicant a “pre-adverse action” notice, along with a copy of the credit report so the applicant can correct any inaccuracies or explain negative information.

Many employers do not do this.

This is patently unfair to working people. Imagine the scenario: you apply for a job, and the employer runs a credit check without your knowledge. The employer rejects your application based on information on your credit report — information that may be incomplete, misleading, or just plain wrong. Because you have no idea that the employer pulled your credit report, you can’t explain your side of the story. You lose out on a job, and the employer has violated federal law.

Employers who have been sued recently over this issue include Whole Foods, Domino’s, K-Mart, Home Depot, Panera, AMC, Publix, Food Lion and others.

Basic fairness — not to mention federal law — requires employers to comply with the Fair Credit Reporting Act. Consumers can bring lawsuits to force companies to comply with FCRA, and can recover penalties, actual damages, and even punitive damages from the violators.

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