Disclosure & Release

For those of you who may have thought I was exaggerating in my last blog, “No kidding, you had better follow FCRA rules,” here’s the latest news.  Pizza Hut is being sued in a class action suit in New York federal court for allegedly violating the regulations of the Fair Credit Reporting Act.

The allegation is that Pizza Hut included a statement releasing themselves from liability in their Disclosure form, which violates FCRA regulations against putting “extraneous information” in the Disclosure form.  The plaintiffs are seeking damages of $100,000 per violation and claim that the class includes everybody who applied for employment with Pizza Hut “on or after January 13, 2013.”  The article I read says the plaintiffs are “targeting 6,000 Pizza Hut restaurants nationwide.”

If the plaintiffs prevail, it could cost Pizza Hut millions, not to mention the legal fees of defending themselves in federal court and, possibly, on appeal.  Upon reflection, one can’t help but wonder why employers aren’t reading the provisions of the Fair Credit Reporting Act more closely.

The point remains the same as before, employees and their attorneys need to follow the regulations set forth in the FCRA precisely.  Any statements about a release from liability need to be put on something other than the Disclosure form.  They also need to remember that the Release form and the Disclosure form are two separate documents requiring two separate signatures!  It’s just difficult to understand why some employers don’t see that even adding their own separate Release from Liability form would be far cheaper than defending themselves in a class action law suit – regardless of whether they win or lose in court.