Lawsuit Alleges Violations of Disclosure and Authorization Requirements

Background check disclosure and authorization requirements can often be a source of confusion for employers, and violations may lead to potential lawsuits. Another lawsuit has been filed alleging violations of federal and state disclosure and authorization requirements – Nunley v. Cardinal Logistics Management Corporation.

Basics of the Complaint

Tony Nunley first filed a complaint against Cardinal on May 11, 2022, in the Superior Court of the State of California, County of San Bernadino. The case was removed to the US District Court for the Central District of California on July 19. The filing removing the case to federal court states that, among other things, Nunley claimed the company’s background check disclosure and authorization forms violated three laws:

  • Fair Credit Reporting Act (FCRA)
  • California Investigative Consumer Reporting Agencies Act (ICRAA)
  • California Consumer Credit Reporting Agencies Act (CCRAA)

In the initial complaint, Nunley claims that Cardinal “at times, obtained and used information in consumer reports to conduct background checks on prospective and existing employees which failed to comply with the requirements under the FCRA.” The alleged violations of the FCRA include, among other things:

  • Disclosure forms with extra information. Specifically, the complaint claims Cardinal’s disclosure included contact details on a screening company that Cardinal did not use for Nunley’s background report. Forms also allegedly had state-specific disclosure requirements.
  • Difficult to read and understand disclosure forms. Nunley claims the documents were provided in small font and were included in a lengthy package of employment-related documents filled with dense text.
  • Failure to obtain proper authorization. Nunley claims that Cardinal obtained background checks without permission. Sometimes this was the result of screening after the authorization expired. Nunley also claims that Cardinal provided a release form for third parties to release information directly to Cardinal, which “is different from an authorization… to procure a consumer report.”
  • Inclusion of liability waivers. According to Nunley, Cardinal’s disclosure included a liability waiver.
  • Failure to provide notifications. The complaint alleges that Cardinal failed to give a summary of certain rights under federal law, among other things.

The complaint also alleges that Cardinal failed to provide a clear and conspicuous disclosure in writing before procuring background reports, as required by ICRAA. Additionally, the complaint alleges that Cardinal obtained “consumer credit reports,” as that term is defined by California law, and failed to provide a disclosure that contained all the requirements of the CCRAA.

The proposed class for this case includes all current, former, and prospective employees of Cardinal who applied for a job with Cardinal and whose background check was performed up to 5 years before the complaint filing.

According to the federal court filing:

“Based on the claims alleged in the Complaint in the State Court Action, Plaintiff seeks, on behalf of himself and the putative class, an assortment of alleged damages, including, but not limited to, punitive damages, statutory penalties, declaratory relief, interest, attorney fees, and costs.”

This lawsuit is still pending. Verified Credentials will attempt to provide updates as they become available.

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