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A California judge has offered preliminary approval of a proposed $2.5 million Postmates background check class action settlement, conditional on the parties making certain modifications to the settlement’s objection provisions.
The settlement comes two years after plaintiff Lorretta Nesbitt of Nevada began this Postmates class action lawsuit. She accuses the on-demand delivery company of running background checks on its job applicants without giving them proper notification of the check as required by the federal Fair Credit Reporting Act.
Defendant Postmates Inc., based in San Francisco, offers on-demand pick-up and delivery of “goods from any restaurant or store in a city.”
Upon reviewing the proposed settlement, San Francisco Superior Court Judge Harold Kahn took issue with provisions in the settlement that allowed Class Members to object to the settlement only in writing and only in advance of the fairness hearing.
As proposed, the settlement would require Class Members to submit written objections prior to the hearing. But Judge Kahn says he generally requires class action settlements to allow Class Members “to appear and object at the final hearing whether they have filed an objection or not.”
The settlement otherwise passes muster, Judge Kahn said.
According to Nesbitt’s Postmates class action lawsuit, the company runs background checks on persons who apply for jobs as Postmates couriers. Nesbitt says these background check constitute “consumer reports” under the Fair Credit Reporting Act.
The Act requires businesses that solicit such reports to provide disclosure of that report to the persons who are the subjects of the background check. Nesbitt alleges that Postmates’ disclosure of its job applicant background checks falls well short of these requirements.
She says the disclosure is a 10-page document including lots of information that is not directly relevant to the background check. But under the FCRA, employers who conduct background checks are expected to disclose the nature of the check in “clear and conspicuous” language and in a single document that contains only the disclosure itself.
Nesbitt says she was confronted with this lengthy consent and non-disclosure agreement after she applied for a position as a Postmates courier in November 2014.
After she filed this Postmates FCRA lawsuit, she later added claims for two other FCRA violations. She said Postmates also failed to give job applicants proper notice before taking adverse employment action against them based on the contents of the background check. Postmates also should have provided its applicants with a copy of the background check report before deciding not to hire them based on the report’s contents, Nesbitt argued.
Postmates has since amended its disclosure practices to comply with FCRA requirements.
The proposed settlement Class would offer benefits for an estimated 174,000 persons who signed up to work as couriers for Postmates. A second, smaller class would include about 16,000 Postmates job applicants who did not receive a copy of their background check report before Postmates denied them a job.
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 Nesbitt and the proposed plaintiff Class is E. Michelle Drake of Berger & Montague PC.
The Postmates Background Check Disclosure Class Action Lawsuit is Lorretta Nesbitt v. Postmates Inc., Case No. CGC15547146, in the California Superior Court for San Francisco County.
UPDATE: The Postmates courier background check class action settlement is now open. Click here to file a claim.
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