McDonald’s Employees Seek Approval of Background Check Settlement

A settlement resolving a McDonald’s employee background check class action lawsuit is ready to be finalized, pending final court approval.

The settlement resolves claims against defendant Richard and Dale Shalhoub Family Trust, a Southern California McDonald’s franchisee operating through several other business entities also named as defendants.

Plaintiffs allege the defendants improperly conducted background checks on thousands of job applicants.

U.S. District Judge Michael W. Fitzgerald granted preliminary approval of the settlement in October 2016. Judge Fitzgerald found the settlement fair in terms of both substance and procedure, but he also instructed the parties’ attorneys to address certain issues before he would grant final approval.

Under terms of this McDonald’s class action settlement, the defendants will establish a settlement fund totaling $950,000, none of which will revert to them under any circumstances.

The settlement fund will also cover payments to each Class Member, which the parties expect to be around $276. As Class Representative, Carter will collect a service award of $10,000. The fund will also cover costs of settlement administration and the legal expenses and attorneys’ fees for the Class.

Carter filed this action in July 2015. He claims several McDonald’s franchisees owned by the Shalhoub Family Trust ordered consumer reports as background checks on more than 2,500 job applicants, without giving them the notice and opportunity to dispute the reports that are required by the Fair Credit Reporting Act.

According to Carter, the McDonald’s franchisees failed to provide applicants with the required “clear and conspicuous disclosure” alerting the applicants that a consumer report would be procured and used in conjunction with their employment application.

Carter says that at the beginning of his second shift at one of the defendant’s restaurants, his manager terminated his employment due to the results of a McDonald’s background check that showed he had a criminal record.

Carter says the report was erroneous and that he had no actual criminal record. He asked his manager for a copy of his McDonald’s background check, but she told him he would have to call the company’s home office to get a copy. Upon calling, Carter says he was told company policy prohibits giving out copies of such reports.

In January 2016, following pretrial motions and exchange of relevant evidence, the parties began working on a settlement agreement via mediated negotiations. They reached a settlement in principle in July 2016 and sought preliminary approval the next October.

A hearing on this motion for final approval is scheduled for March 13.

Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.

Counsel for Carter and the plaintiff Class are attorneys James A. Francis and David A. Searles of Francis & Mailman PC and Stephanie R. Tatar of Tatar Law Firm APC.

The McDonald’s Background Check FCRA Class Action Lawsuit is James Wesley Carter v. Shalhoub Management Co., et al., Case No. 5:15-cv-1531, in the U.S. District Court for the Central District of California.