Petco Wants ‘Hidden’ Credit Check Class Action Dismissed

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Petco filed a motion to dismiss a proposed class action lawsuit against the pet store company that alleges violations of the Fair Credit Reporting Act (FCRA), saying that the applicants did not allege concrete harm, similar to the Spokeo ruling.

In the Spokeo case in May, the United States Supreme Court ruled that “Article III standing requires a concrete injury even in the context of a statutory action.” Petco says that specific allegations of harm were not alleged by either plaintiff.

Plaintiffs Angelica Zimmer and Jacklyn Feist argued in the Petco class action lawsuit that the authorization to obtain credit checks of potential employees was buried within the fine print of the pet supplier’s online employment application, in violation of the FCRA.

The Petco class action lawsuit was initially filed in state court in May of this year, and it was removed to federal court the following month.

Petco indicates that Zimmer admitted she was notified of Petco’s intent to perform a background check upon her application to a retail store in California in July 2014 at the location where she was eventually hired. Petco maintains that the complaint by Zimmer does not indicate her actions would have differed if the credit check disclosure would have been more clearly visible.

The second plaintiff, Feist, was denied employment with Petco in October 2014 and alleged in the original complaint that Petco failed to provide her with a copy of her consumer report that would allow her to address any inaccurate information contained within.

Petco states in its motion to dismiss that no adverse reactions were taken against Feist that would have prompted Petco’s obligation to provide those documents to her.

In her complaint, Feist alleged that Petco told her repeatedly that the background check was still pending and “like Zimmer, cannot articulate any damage that was caused by Petco’s alleged violations,” the company states in its recent motion.

“In short, plaintiffs’ complaint is full of vague, conclusory allegations without any merit or substance,” Petco argues. “This is precisely the type of complaint the United States Supreme Court has held fails to satisfy the requisite pleading standards.”

While the Ninth Circuit has not yet interpreted the “stand-alone disclosure requirement,” Petco says district courts have not ruled that employers are prohibited from offering FRCA disclosures along with other documents as part of the job application process.

“Petco’s consent form is ‘clear and conspicuous,’ and consists ‘solely’ of the disclosure as it is contained in a separate ‘tab’ of the employment application,” Petco argues. Moreover, the information provided in the disclosure is readily understandable by the employee and, to the extent that any of the information contained in the disclosure is ‘extraneous,’ it enhances the disclosure.”

Additionally, Petco says that even if the plaintiffs had adequately pled FCRA violations, they failed to show that Petco’s actions were willful, as they must do to recover statutory damages.

To summarize, Petco states, “Here Plaintiffs allege no concrete harm and only seek statutory damages based on alleged violations of the FCRA. Thus, without any concrete injury, Plaintiffs lack standing and the Complaint should be dismissed.”

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

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

UPDATE: 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 2: 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 3: August 2018, the Petco employee background check class action settlement is now open. Click here to learn more.