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Prison Operator GEO Accused of Fair Credit Act Breaches

Class Action Litigation Report®, BNA—Kevin McGowan

[Reproduced with permission from Daily Labor Report, 212 DLR A-1 (Nov. 3, 2015). Copyright 2015 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com]

A private company that operates prisons, and a consumer background reporting firm are violating federal and state fair credit laws by not providing job applicants with timely notice of reports including criminal histories that are used to deny them employment, according to a lawsuit filed in the U.S. District Court for the Eastern District of New York (Keels v. GEO Grp. Inc. , E.D.N.Y., No. 15-6261, 10/30/15).

The proposed class action alleges that the GEO Group Inc. doesn't give applicants with criminal histories prior notice or a chance to challenge the reports before withdrawing job offers based on the reports. Accurate Background Inc. is also named as a defendant.

Plaintiff Eric Keels, who alleges he was denied a cook position at a Queens, N.Y., detention facility because of such a report, seeks class certification for GEO Group applicants nationwide and relief that includes punitive damages if a court finds liability.

The GEO Group systematically violates the Fair Credit Reporting Act by using consumer reports that include past convictions and arrests to make adverse employment decisions without first providing the applicant with notice of its intent to take adverse action, a copy of the report and a summary of the applicant's FCRA rights, the complaint alleged.

Accurate Background violates the federal law by failing to provide applicants with appropriate pre-adverse action disclosures, including a copy of the relevant consumer report and a summary of the applicant's FCRA rights, the complaint alleged.

Background Checks Under Scrutiny

Employers' use of criminal background checks has received increased scrutiny in recent years, as the Equal Employment Opportunity Commission in 2012 issued enforcement guidance on the potential for unlawful discrimination against black, Hispanic or male applicants when making hiring decisions based on such checks (80 DLR A-1, 4/25/12).

After some local jurisdictions enacted “ban the box” laws to eliminate criminal history questions on job applications, Congress is considering the Fair Chance Act (S. 2021, H.R. 3470), a bill with bipartisan support that would require the federal government and federal contractors not to ask about an applicant's criminal history until after a job offer has been made (175 DLR A-11, 9/10/15).

President Barack Obama has directed the Office of Personnel Management to modify federal hiring rules to delay inquiries into criminal history until later in the hiring process for federal government jobs (211 DLR A-6, 11/2/15).

Seven Proposed Classes

Keels alleged the GEO Group extended him a job offer as a cook at the Queens Detention Facility but withdrew the offer after receiving a report from Accurate about his prior criminal conviction and incarceration.

Although Keels consented to a background check, he never received a copy of the report or notice of his rights under the FCRA or the New York State Fair Credit Reporting Act before the GEO Group withdrew the job offer, he alleged.

Under the FCRA, companies “must comply with strict requirements before using background check information for employment purposes,” said Ossai Miazad of Outten & Golden in New York, who represents Keels.

“Geo Group's practice of refusing to hire applicants without giving them a chance to review, let alone dispute or provide more information about, their background check results, deprives job seekers of their rights,” Miazad said in a Nov. 2 statement.

Keels will seek class certification under the Federal Rules of Civil Procedure 23(b)(2) and 23(b)(3) for seven proposed classes of applicants allegedly denied their rights under the FCRA and New York state law, according to the complaint.

The proposed classes include all applicants for employment with the GEO Group within the past five years who were subjected to an “adverse action” based on information contained in a consumer report without receiving a copy of that report or notification of their rights under the FCRA or the New York state law.

A separate class includes all GEO Group applicants within the past five years about whom Accurate delivered consumer reports to GEO likely to adversely affect their job chances but didn't provide the legally required information to the applicant named in the report.

The GEO Group employs approximately 20,500 workers worldwide, with the vast majority located in the U.S., according to the complaint.

“Although [Keels] does not know the precise number of job applicants with criminal records who received consumer reports from Accurate or were denied employment at Geo, the number is far greater than can be feasibly addressed” by joining all the individuals as plaintiffs, the complaint said.

The “precise number” of affected applicants also is “uniquely within” the possession of GEO Group and Accurate Background, the complaint said.

Defendants Deny Alleged Violations

Both the GEO Group and Accurate Background said they comply with the applicable laws.

“While as a matter of policy, we cannot comment on specific details related to litigation matters, our company takes these matters very seriously,” said Pablo Paez, the GEO Group's vice president for corporate relations, in a Nov. 3 e-mail to Bloomberg BNA. “Our company believes that this lawsuit has no merit, and we intend to vigorously defend against these claims.”

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In addition to Miazad, Christopher McNerney of Outten & Golden LLP in New York represents Keels.

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