Petco Can’t Escape Employee Background Check Class Action

A federal judge says Petco must continue to face claims that the background check language in its job applications violates the Fair Credit Reporting Act.

U.S. District Judge Marilyn L. Huff denied Petco’s motion to dismiss, finding that plaintiffs Jacklyn Feist and Angelica Zimmer had adequately pled willful violations of the FCRA and laid the grounds for their own standing to sue.

The judge noted that many elements of Petco’s arguments for dismissal should be addressed later in the litigation, after development of the evidentiary record.

Feist and Zimmer filed this Petco class action lawsuit earlier this year, alleging the pet supply retailer improperly conceals an authorization for a background check deep within its job application forms.

The plaintiffs say that under the FCRA, an authorization for a background check must be disclosed clearly and conspicuously in a stand-alone document.

Both Feist and Zimmer say they completed employment applications with Petco. They claim the authorization for the background check was buried in a 35-paragraph form containing other information like an authorization for third parties to disclose information, a summary of state and federal consumer rights, and a list of entities that enforce the FCRA.

They cite guidance from the FTC saying that Congress purposely provided for a stand-alone disclosure so that applicants would not be distracted by other information at the time they authorize the disclosure.

While Petco offered Zimmer a job, the company ultimately denied employment to Feist based on the results of her background check. Feist says she never got a proper opportunity to contest the results of that background check.

Petco moved for dismissal of the plaintiffs’ claims this past summer. The company claimed its background check form was indeed clear and conspicuous. It argued that the plaintiffs’ allegations were too vague and conclusory to state a claim and that they alleged no real injury that would give them standing to sue.

Judge Huff found that the plaintiffs’ pleadings adequately stated a case for FCRA violations. Whether or not they were actually confused or distracted by the extra information is a matter better resolved with a decision on summary judgment, the judge said. For now, the plaintiffs need only allege that they could have been so distracted.

Petco also challenged the plaintiffs’ claim that the alleged FCRA violations were willful. Judge Huff determined that at this early stage, the plaintiffs need only allege willfulness; proving it with evidence is a matter for a later stage in the Petco class action lawsuit.

Likewise, with Petco’s challenge to the plaintiffs’ standing, the judge determined that at this point merely alleging that Petco’s forms fail to comply with the FCRA is an adequate allegation of injury to give the plaintiffs standing to sue.

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

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