Labor & Employment

FTC considers whether databases tracking employee thefts violate federal credit reporting law

Large databases that track employee thefts—and sometimes block accused workers from finding new jobs—are being probed by the Federal Trade Commission.

The FTC is examining whether the databases comply with the Fair Credit Reporting Act, a federal law intended to give consumers more control over inaccurate information, the New York Times reports. The databases amount to virtual blacklists, according to employment lawyers.

The FTC has already reached a settlement with HireRight after claiming that some of the company’s records were incorrect and it was too difficult to dispute the information, the story says.

Shunned workers are filing lawsuits against the companies. The story highlights one plaintiff in a suit against LexisNexis, which owned the retail theft database Esteem until this year. The database is now owned by the First Advantage Corp.

Plaintiff Keesha Goode claims she was inaccurately accused in the theft of $34.97 in merchandise while working at the discount store Forman Mills in 2008. The retailer had claimed Goode did not ring up a former employee’s purchases, the story says. Faced with the accusation, Goode wrote a statement saying she was just doing her job and she was being made out as a liar. She was later turned down for a job at Dollar General after a report in Esteem said she had a “verified admission” for employee theft.

Goode sent a letter to LexisNexis saying she was accused of not turning in a former employee and she didn’t steal anything herself. The company said it conducted a new investigation and it had verified the accuracy of the information. LexisNexis is seeking dismissal of the suit.

We welcome your comments, but please adhere to our comment policy and the ABA Code of Conduct.

Commenting is not available in this channel entry.