Lowe’s has reportedly settled a controversial employee background check lawsuit for $2.2 million in damages and legal fees.
Last week, a federal judge in North Carolina approved the multi-million dollar settlement between Lowe’s and a group of people who were denied jobs with the company due to personal information found on the background check reports that Lowe’s uses in their employee hiring and promotion decisions. Lowe’s was accused in the suit of violating people’s rights under the Fair Credit Reporting Act.
United States District Judge Richard Voorhees approved the settlement, which gives $60.00 in cash to almost 38,000 job applicants who were potentially harmed by the company’s background check procedures and reports. The settlement also provides $752,540 in attorney’s fees for the plaintiffs’ attorneys.
The suit was originally filed against Lowe’s and their background check provider LexisNexis Screening Solutions Inc. by Lowe’s job applicants Jason Brown, Laszlo Bozso and Meris Dudzic. The suit was filed regarding the use of background check reports by Lowe’s to investigate the criminal records of people who apply for jobs with the company.
According to the suit, Lowe’s used these background checks to make hiring decisions and did not provide potential employees with a copy of their reports, in violation of the Fair Credit Reporting Act. The suit also claimed that Lowe’s did not notify people in writing of their rights under the Fair Credit Reporting Act that allow them to dispute details and records found on their background check reports.
This suit was part of a consolidated case that involved a similar suit that was filed in a Florida federal court by existing Lowe’s employees, who said that they were passed over for promotions at the company due to their background check reports. The two suits were consolidated in February 2015, and the employee part of the case was settled in October 2015 for more than $6 million.
This settlement now releases Lowe’s from any more claims regarding the background check suit. However, the claims against their background check provider LexisNexis Screening Solutions Inc., which now does business as First Advantage Background Services Corporation, are still ongoing in federal court before Judge Voorhees.
The details of these suits and settlements will undoubtedly be looked at closely by both employers and background check companies.