Dish Network Will Pay $1.75M to Settle Background Check Class Action

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Dish Network has reached a $1.75 million settlement with a group of contractor technicians who allege the satellite television company violated the Fair Credit Reporting Act (FCRA) by not providing them with proper consent and disclosure forms needed to run their background checks.

Plaintiff Scott Ernst filed the class action lawsuit against Dish Network and background check company Sterling Infosystems in 2012, accusing the companies of routinely obtaining and using information in consumer reports to conduct background checks on prospective and existing Dish Network technicians.

The complaint also alleges that Dish Network uses this information as a basis for adverse employment actions, such as prohibiting technicians from performing work installing and maintaining Dish Network services by rating them as “high risk.”

In 2010, Dish Network allegedly implemented a customer safety program that required third-party contractors to obtain a background report on any contractor technician who entered the home of a Dish Network customer.

Dish Network reportedly worked with Sterling Infosystems to develop a template for the information to be provided to third-party contractors in the reports about their technicians.

Rather than receiving the full background report, Dish Network received only a summary that contained specific information, including the individual’s rating as either “high risk,” “low risk,” or “review,” according to the lawsuit.

While use of consumer report information for employment purposes is not unlawful, it is subject to strict disclosure and authorization requirements under the Fair Credit Reporting Act (FCRA).

Ernst says Dish Network willfully violated these requirements, including reporting on information that was more than seven years old, and thereby violated his rights as well as those of potential Class Members.

According to the class action lawsuit, Dish Network allegedly unlawfully procured consumer reports without receiving proper authorization from Class Members.

Additionally, Dish Network allegedly failed to disclose their actions in procuring these reports to Class Members.

Furthermore, Dish Network used this undisclosed consumer report information without providing Ernst and other affected Class Members with a copy of the obtained information or a reasonable opportunity to correct any inaccuracies.

Instead, the company purportedly took adverse employment action on technicians based on the information.

Specifically, Ernst alleges that Sterling deemed him as “high risk” and provided Dish Network with an outdated report going back 20 years.

Based on this alleged improperly obtained information, Ernst was banned by Dish Network in performing work for his contracting company.

Under the terms of the Dish Network FCRA settlement, the “adverse action class” which consists of about 9,000 contractor technicians who were regarded as “high risk,” will receive approximately $480 each.

The settlement is also expected to provide about $80 to each of the nearly 38,000 technicians who did not authorize or receive notice from Dish Network about the use of the background checks.

A Class Member may be eligible for both settlement tiers, however, individuals will only receive the higher settlement amount and not both.

Each of the three lead plaintiffs, including Ernst will receive a $5,000 incentive award for their part in representing the Class. Attorneys’ will receive approximately one-third of the proposed settlement.

Sterling Infosystems separately settled with the Class of Dish Network contractor technicians for $4.75 million last November over allegations the background check company reported outdated information, including charges and citations that never led to criminal convictions despite the FCRA preventing the inclusion of any adverse data other than conviction records that occurred more than seven years prior to the report being provided.

That settlement also included a claim that Sterling failed to provide Class Members with copies of the reports after being requested to do so.

Dish Network maintains it did not intentionally violate the FCRA’s requirements, and that their alleged violation was not willful.

More information about the Dish Network FCRA class action lawsuit settlement was not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also “Follow” this case by using your free Top Class Actions account to receive notifications when this article is updated.

Ernst is represented by E. Michelle Drake and Joseph C. Hashmall of Berger & Montague, P.C.

The Dish Network Background Check Class Action Lawsuit is Ernst v. Dish Network LLC, et al., Case No. 1:12-cv-08794, in the U.S. District Court for the Southern District of New York.

UPDATE: The Dish Network Background Check Class Action Settlement is now open! Click here to file a claim.