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Swift Transportation agrees to pay $4.4M to end class litigation over FCRA background checks

By Pamela Wolf, J.D.

Under a proposed settlement agreement filed with the court Monday, April 21, giant truckload carrier Swift Transportation Company would pay $4.4 million to resolve class allegations that it violated the Fair Credit Reporting Act in its handling of criminal background checks for online applicants (Ellis, III v Swift Transportation Co of Arizona, LLC, ED VA).

According to the complaint filed in the Eastern District of Virginia on July 23, 2013, Swift violated the FCRA when, without the authorization of non-in-person applicants, it obtained copies of consumer reports, including criminal backgrounds checks, and relied upon them in taking adverse employment actions against the applicants without notifying them of their rights under the FCRA. The action sought to recover statutory damages per consumer between $100 and $1,000, together with punitive damages, and attorneys’ fees and costs.

The allegations of complaint cover the five-year period immediately preceding the filing of the action. The class was anticipated to include more than 10,000 members.

Class of aggrieved individuals. The class as proposed in the agreement would comprise: “All consumers residing in the United States who applied for employment in a Department of Transportation regulated position with Swift via facsimile, telephone, an internet website, electronic mail, regular mail, or through a third party from July 23, 2008 through September 30, 2012, and as to whom Swift procured a criminal background, motor vehicle history report, or Consumer Report, which report was obtained by Swift before there had been at least one in-person interaction with the consumer.”

Settlement. Under the proposal that would put an end to the class litigation, Swift would pay a total amount of $4,400,000, which includes payment to class members, attorneys’ fees and costs, service awards to the named plaintiffs, and costs of settlement notice and claims administration. Under the agreement, class counsel will not be opposed in its application for attorney fees, costs, and other expenses in an amount not to 30 percent of the settlement funds.

Class members would receive $50 each under the proposal. In addition, named plaintiff Ellis would be able to seek, unopposed, a $5,000 service award, while the seven other named plaintiffs would be permitted to pursue unopposed $1,000-service awards.

Denial of liability. Swift denied any wrongdoing or liability, but has determined that continuing to litigate the action “would be protracted and expensive, and also has taken into account the uncertainty and risks inherent in any litigation, especially in complex cases such as this one,” according to the agreement. Swift thought it “desirable and beneficial to the company” to settle the matter as outlined in the proposal.