Five Guys Enterprises, franchisor of Five Guys Burger Co., has been accused of California labor violations by former employees including violating the FCRA by conducting background checks on employees and not notifying them correctly.
According to Troutman Sanders LLP, The plaintiff, Jeremy Lusk, alleges that when he applied for his position with Five Guys they presented him with a background check disclosure that included, among other things, agreements regarding his drug use, references, fiduciary obligations, and consent to arbitration. He also alleges the disclosure included a release of liability and that Five Guys failed to properly inform him of his rights under the FCRA. He further claims Five Guys procured a background check without first providing him the separate disclosure required for such reports. From those claims, he alleges Five Guys violated numerous provisions of the FCRA.
Lusk also brings similar claims under the California Investigative Consumer Reporting Agencies Act, based on the same alleged failures in Five Guys’ disclosure forms, such as the inclusion of extraneous information. He also alleges the disclosure failed to include certain items required by California law, such as the name, address, and telephone number of the agency preparing the report. In addition to alleging a violation of California’s Investigative Consumer Reporting Agencies Act, Lusk also alleges Five Guys violated the California Consumer Credit Reporting Agencies Act, which strictly regulates credit information. He alleges Five Guys procured credit information about prospective employees in connection with their applications and, again, on the back of the same faulty disclosure, was denied information required by the California statute.
According to the FCRA, before an employer secures a consumer report on an employee or applicant, they must tell the applicant or employee in writing and in a stand-alone format. The employer must also certify that they notified the applicant or employee and got their permission to get a consumer report, complied with all of the FCRA requirements, and will not discriminate against the applicant or employee or otherwise misuse the information, as provided by any applicable federal or state equal opportunity laws or regulations.
California is one of the states that limit the circumstances in which employers may use credit reports in making employment decisions. California law requires employers to give notice if they plan to check credit reports, and again if they plan to use the information in the report as the basis for a negative employment decision.
To ensure compliance, it’s a good idea to continually monitor the applicable federal and state laws related to consumer reports. Some states, like California, restrict the use of consumer reports – usually credit reports – for employment purposes.
Jeremy R. Lusk v. Five Guys Enterprises LLC et al.