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$3.4M proposed deal would resolve FCRA claims against Home Depot

By Pamela Wolf, J.D.

Under a proposed deal to resolve a Fair Credit Reporting Act class action, Home Depot would shell out about $3.4 million to bring the litigation to an end. At least $1.8 million of that would go to a class of about 120,000 job applicants who signed off on background check authorization forms that included a release of liability, as long as they didn’t opt out of the proposed settlement. Another minimum of $630,000 would go to class members who submitted timely and valid claim forms.

Home Depot violated the FCRA requirement that a “preauthorization” form, on which an employer discloses its intent to obtain a credit report or background check, must contain only the disclosure, according to the plaintiff’s motion for preliminary approval of the settlement. This means, according to the plaintiff, that the form cannot include any extraneous information. Home Depot’s preauthorization background and/or credit check disclosure forms purportedly did include a release from liability. The plaintiff asserted that any release must be separate from the disclosure under the FCRA.

The proposed settlement came after “extensive investigation and discovery” by the plaintiff, which included reviewing thousands of documents and deposing Home Depot’s designated deponent, as well as negotiations during and after mediation.

Proposed class. An estimated 120,000 individuals would be included in the proposed Rule 23 settlement class, which would consist of all persons who, between April 24, 2011, and May 11, 2015, applied for employment with the home improvement giant and executed one of the two forms at issue, and who did not opt-out of the settlement.

Monetary terms. Under the agreement, those who do not opt out of the settlement would receive $15 each, even if they did not submit a claim form. Given the estimated 120,000 class members, that would require Home Depot to pay out at least $1.8 million. If 15 percent of class members submit valid and timely claim forms, they would receive $35 instead of $15, creating a minimum additional payout by Home Depot of $630,000, which would be paid out by adjusting the pro rata share to up to $100 each if less than 15 percent of class members submit timely and valid claim forms.

In addition, Home Depot has agreed not to oppose an award of attorneys’ fees and costs of up to $995,000. The plaintiff would apply for a service award of $5,000 under the deal. Under the total package, Home Depot has agreed to pay a minimum of $3,430,000 to resolve the litigation.

The cases, Fernandez v. Home Depot, USA, Inc, was filed in the Central District of California; the case number is 8:13-cv-00648-DOC-RNB.