Petco Class Action: Retailer Hides Credit Checks from Job Seekers

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A class action lawsuit alleges that pet supply retailer Petco conducted credit checks and other consumer reports on its job seekers, and buried the authorization in the fine print of its online application.

The complaint argues that Petco’s hidden authorization language violates the federal Fair Credit Reporting Act (FCRA).

According to the Petco class action lawsuit, the FCRA requires that “an employer may not procure a consumer report concerning a job applicant or employee unless a ‘clear and conspicuous’ disclosure is made in a stand-alone document that ‘consists solely of the disclosure’ informing the applicant or employee that a report may be obtained for employment purposes.”

The complaint alleges that instead of a “clear and conspicuous” and separate disclosure, Petco has a text box in the middle of its online application “which appears on a screen with small·font wording in the middle that the applicant scrolls through by dragging a scrollbar on the right hand side” called the Background Check Disclosure.

The class action states that if printed out, the disclosure would take up five pages, and which supposedly authorized Petco to conduct regular consumer reports of its applicants and employees. This disclosure does not meet federal requirements, the class action asserts.

In addition, the lawsuit claims that if an employer makes an “adverse decision” based on something in a credit report, they have to notify the consumer of that fact. The complaint alleges that Petco fails to do this, as well.

Plaintiff Jacklyn Feist states that in October of 2015 she applied online to work at a Petco store, had two interviews, and was given a job. However, in the meantime Petco obtained a consumer report from a vendor called HireRight, which stated that she “did not meet company standards.”

Feist claims that when she reported for her first day of work, she was told there was a problem with her background check and she was not allowed to work. Feist asserts that she was never provided notice about the background check or the adverse decision from it, as required by the FRCA.

Plaintiff Angelica Zimmer says that she completed the online application for Petco in July of 2014, and worked for Petco from September 2014 to January of 2015. Zimmer claims that in August of 2014 Petco received a consumer report on her from vendor LexusNexus without her knowledge.

The Petco hidden credit check class action seeks to form two Classes: the first for all Petco employees or prospective employees in the U.S. who Petco obtained a consumer report on within the last five years; and the second for all Petco employees or prospective employees in the U.S. who were not hired or were terminated based on information from a consumer report in the last five years.

The class action requests damages authorized by the FCRA of $1,000 per violation plus punitive damages.

The plaintiffs are represented by Mark S. Greenstone and Lionel Z. Glancy of Glancy Prongay & Murray LLP.

The Petco Hidden Credit Check Class Action Lawsuit is Jacklyn Feist, et al. v. Petco Animal Supplies Inc., Case No. 3:16-cv-01369, in the U.S. District Court for the Southern District of California.

UPDATE: On June 13, 2016, Petco filed a motion to dismiss a proposed class action lawsuit against the pet store company saying that the applicants did not allege concrete harm, similar to the Spokeo ruling.

UPDATE 2: On Nov. 22, 2016, a federal judge ruled that Petco must continue to face claims that the background check language in its job applications violates the Fair Credit Reporting Act.

UPDATE 3: On April 20, 2018, Petco and two job applicants are seeking preliminary approval of a $1.2 million settlement in a lawsuit claiming the company’s background check policies are unlawful.

UPDATE 4: August 2018, the Petco employee background check class action settlement is now open. Click here to learn more.