One recent case involving Maxim Healthcare Services, Inc. led to a whopping $1.2 million settlement. What was the cause? The liability waiver in the background check authorization form. While small details during the hiring process might not be something that you are putting a lot of thought into, this case highlights how critical a legally-sound application process is for every business.
In this case, Maxim Healthcare Services, Inc. had a liability waiver in their background check, which is illegal. The authorization form contained a liability waiver, and the FCRA prohibits including that waiver. The authorization form was used nationally from April 30, 2009 to August 27, 2012,
Inserting an illegal liability waiver is a common mistake that employers make. Thankfully, compliance with FCRA is simple if you follow the rules and receive advice from an experienced consultant like James P. Randisi. Always avoid inserting a liability waiver in FCRA authorization forms. You must provide appropriate disclosures to applicants before getting their consumer reports. Here we detailed what you must include before procuring a consumer report on an applicant:
- A clear and concise disclosure in writing that a consumer report could be obtained for employment purposes
- The applicant’s written authorization for you to obtain the form
We can help you to ensure that your forms are legal and do not run the risk of a lawsuit. It’s important to know that many lawsuits like this involve steep legal fees and high settlement amounts. In this case, the $1,200,000 settlement only gave $5,000 to the plaintiff. A whopping $300,000 went to the plaintiff attorneys, while a portion of the rest went to a general settlement fund that would pay out affected people. If you make this common liability waiver error, you could be low-hanging fruit for plaintiff attorneys looking to reap the rewards. Don’t allow your business to fall victim to a high-cost mistake.
James P. Randisi, President of Randisi & Associates, Inc., has since 1999 been helping employers protect their clients, workforce and reputation through implementation of employment screening and drug testing programs. This post does not constitute legal advice. Randisi & Associates, Inc. is not a law firm. Always contact competent employment legal counsel. Mr. Randisi can be contacted by phone at 410.494.0232 or Email: info@randisiandassociates.com or the website at randisiandassociates.com.
