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Dollar General to pay $4M to end FCRA class action

By Pamela Wolf, J.D.

Dollar General has agreed to pay up $4.08 million in order to resolve allegations that it violated the FCRA when it conducted background checks on job applicants and made adverse employment decisions without properly complying with statutory requirements. A federal court in Virginia on Thursday, October 16 granted preliminary approval of a deal that would end litigation on the class action complaint in Marcum v. Dulgencorp.

The plaintiffs contended on behalf of a putative class that they were denied employment with Dollar General because of their employment-purposed consumer report. The adverse decision, according to the plaintiffs, was either made before the plaintiffs received a copy of their consumer report and a summary of rights, or the company neglected to provide the documents at a meaningful and reasonable time prior to making the adverse decisions. Moreover, the summary of rights form eventually sent to applicants was purportedly outdated.

The proposed settlement would benefit a Rule 23(b)(2) class of “several thousand consumers across the country,” according to the proposal. Actual damages would not be released as to those class members — it is purportedly the most substantial, far-reaching part of the deal. A Rule 23(b)(3) class, however, would release their FCRA and related claims in exchange for a pro rata share of the settlement funds; this class would include about 112,000 consumers.

The court preliminarily certified a Rule 23(b)(2) class that includes all natural persons who, according to the company’s records, were the subject of a background check report used for an adverse employment decision during the period beginning on February 13, 2007 through July 1, 2013. The court also preliminarily certified two Rule 23(b)(3) classes: one for members whose claims accrued between February 13, 2010 and July 1, 2013; and another for members whose claims accrued between February 13, 2007 and February 12, 2010.

The $4.08-million settlement payment would be reduced by about $270,000 for costs of notice and administration, leaving a net claims fund of $3,810,000. Attorney’s fees of not more than 25 percent of the net settlement fund, reimbursement of costs, and not more than $10,000 in service awards for each class representative will also be deducted from the settlement fund. Members of the first Rule 23(b)(3) class are expected to walk away with about $53 each; the net to members of the second Rule 23(b)(3) class is similarly capped at $53 each.