Case :-cv-00-r-jpr Document Filed 0// Page of Page ID #: 0 Michael A. Caddell (SBN mac@caddellchapman.com Cynthia B. Chapman (SBN Craig C. Marchiando (SBN CADDELL & CHAPMAN Lamar Street, Suite 00 Houston, TX 00 Phone: ( - Fax: ( -00 Joshua E. Kim, Esq. (SBN 0 joshua@anewwayoflife.org A NEW WAY OF LIFE REENTRY PROJECT P.O. Box Los Angeles, California 00 Ph: ( - Fax: ( - Devin H. Fok, Esq. (SBN devin@devinfoklaw.com THE LAW OFFICE OF DEVIN H. FOK P.O. Box Alhambra, CA 0- Ph: (0 0- Fax: ( - Attorneys for Plaintiff UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOUTHERN DIVISION DONALD ACOSTA, individually and on behalf of all similarly situated, vs. Plaintiff, US FOODS, INC. Defendant. CASE NO. -CV-00 CLASS ACTION COMPLAINT FOR DAMAGES Violations of the Fair Credit Reporting Act, U.S.C., et seq. JURY TRIAL DEMANDED Plaintiff DONALD ACOSTA, on behalf of himself and the Class defined below, brings this Class Action Complaint against Defendant US Foods, Inc., and alleges as follows: ORIGINAL COMPLAINT -
Case :-cv-00-r-jpr Document Filed 0// Page of Page ID #: 0 I. NATURE OF THE ACTION. Plaintiff brings this action for violations of the Fair Credit Reporting Act ( FCRA, U.S.C. a x, for US Foods failure to provide preadverse action notices to consumers before taking adverse-employment actions against them. When employers like US Foods chooses to use consumer reports as a basis for making hiring decisions, they subject themselves to the strictures of the FCRA.. One of the most basic FCRA rights at play in the employment context is that of notice to consumers regarding information that is being used to decide whether to offer an applicant employment. US Foods automatic procedure for denying or terminating employment to applicants systematically deprives consumers of this important right.. US Foods uses the services of background check companies or consumer reporting agencies ( CRAs to conduct its employment screening, which includes procuring criminal background checks on US Foods job applicants and employees. After receiving background reports on applicants and employees, US Foods automatically makes adverse employment decisions based on a job applicant s criminal history. If the job applicant is adjudicated as FAILED BACKGROUND CHECK, the job applicant s application status is automatically changed within US Foods employment tracking system to REJECT CANDIDATE, and a rejection letter is sent to the applicant.. A job applicant who is adjudicated as FAILED BACKGROUND CHECK is not afforded any opportunity to dispute the adjudication. Specifically, despite the fact that the FCRA expressly requires it, the applicant is not provided with any notice before US Foods takes the adverse action. Further, the applicant is not provided with the results of the adjudication. ORIGINAL COMPLAINT -
Case :-cv-00-r-jpr Document Filed 0// Page of Page ID #: 0. Nor does US Foods provide the job applicant with a full copy of the background check report or criminal history prior to the adverse action. Rather, US Foods takes action solely on the basis of the background check and without contacting the applicant. The applicant first learns of the adverse adjudication when he or she receives US Foods rejection letter.. As further discussed below, the FCRA requires that users of consumer reports, such as US Foods, who intend to take an adverse action against an individual based in whole or in part information contained in a consumer report, must first provide notice informing the consumer that an adverse action will be taken and provide the consumer with a reasonable opportunity to dispute the information disclosed in the consumer report. U.S.C. b(b(.. In direct violation of the FCRA, US Foods does not provide any preadverse action notice during any stage of the adjudication process. The failure to provide such notice before the negative adjudication robs consumers of their statutorily guaranteed opportunity to challenge the accuracy of the adjudication and/or the information on which the adverse employment decisions are based. II. THE APPLICABLE LAW. Under the FCRA, U.S.C. b(b((a, a user or joint user of background checks or consumer reports to make employment decisions must provide to the job applicant or employee a notice containing the following information before taking any adverse employment action: a. A copy of the report; and b. A description in writing of the rights of the consumer under the FCRA. 0. The authorities interpreting that section have also held that the timing of the notice must be such that the consumer is afforded a reasonable ORIGINAL COMPLAINT -
Case :-cv-00-r-jpr Document Filed 0// Page of Page ID #: 0 opportunity to dispute or discuss the information in the report before the employer renders an adverse-employment decision.. After an adverse action occurs, the consumer job applicant or employee must receive a second notice, mandated by U.S.C. m(a, informing the applicant or employee that adverse employment action has been taken. Hereafter, Plaintiff will refer to the first of these notices as the preadverse action notice and the second as the adverse action notice.. The reasons for the pre-adverse action notice requirement in employment situations are to alert the job applicant that he or she is about to be rejected based on the contents of a report, and to give him or her an opportunity to challenge the accuracy of the information with the credit reporting agency or the employer, or to at least discuss sensitive information with the employer, before the job prospect is lost.. Congress recognizes that these rights are extremely important to the consumer and help to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer s right to privacy. U.S.C. (a( (emphasis added.. Even where an applicant s background may disqualify him from employment, following the FCRA s notice requirements would inform him that his criminal history was a factor in the employer s adverse employment decision. The consumer would likely then be motivated to seek various state remedies to expunge his criminal records. In California, this is called a dismissal pursuant to Penal Code... To ensure compliance with the FCRA, Congress further requires that before any consumer reporting agency provides consumer reports on an applicant, the reporting agency must have obtained a certification from the employer that it will comply with U.S.C. b(b( by providing the ORIGINAL COMPLAINT -
Case :-cv-00-r-jpr Document Filed 0// Page of Page ID #: 0 consumer with a pre-adverse action notice whenever the employer decides to take adverse action based in whole or in part on the consumer report. U.S.C. b(b((a.. Despite this certification and the mandate under the FCRA, US Foods knowingly, intentionally, and/or recklessly fails to provide pre-adverse action notices compliant with the FCRA prior to: a. Adjudicating job applicants as FAILED BACKGROUND CHECK or REJECT CANDIDATE, and/or b. Sending out rejection letters to job applicants. III. THE PARTIES. Plaintiff DONALD ACOSTA is a resident of Anaheim, California. The city of Anaheim is located in Orange County.. Defendant US Foods is a corporation with its principal place of business in Illinois. US Foods regularly and systematically conducts business in California.. At all times relevant to this case, US Foods was a user of consumer reports for employment purposes as those terms are defined in the FCRA. IV. JURISDICTION. Jurisdiction of this Court arises under U.S.C. p and U.S.C... Jurisdiction is further conferred by the Class Action Fairness Act, U.S.C. (d. V. PLAINTIFF S EXPERIENCE WITH US FOODS ORIGINAL COMPLAINT -
Case :-cv-00-r-jpr Document Filed 0// Page of Page ID #: 0. Plaintiff is informed and believes that, contrary to EEOC guidelines, US Foods employment criteria disqualifies from employment anyone with a felony or misdemeanor conviction in his criminal history.. Plaintiff submitted an online application to US Foods for an Inventory Clerk position on March,.. US Foods extended a job offer on April,, which Plaintiff accepted that same day.. US Foods uses an employee tracking system called Taleo that tracks the progress of every applicant, including the status of the criminal background check on job applicants.. Plaintiff is informed and believes that Kroll, the CRA US Foods uses to conduct its background checks, automatically adjudicates the consumer s eligibility for employment on the basis of the criminal records information it obtains. Kroll representatives then input the adjudication into Taleo.. Plaintiff is informed and believes, and thereon alleges, that in the case that adverse information is found, Kroll recommends to US Foods through the Taleo system to accept, reject, or review the candidate. Review or Needs Client Review is an adjudication by Kroll that is issued upon a finding of potentially disqualifying information such as the existence of a criminal history. On the basis of Kroll s adjudication, US Foods immediately rejects the candidate and rescinds the candidate s job offer.. The decision to deny the candidate employment is at that point final.. Plaintiff is informed and believes that it is US Foods routine and systematic practice to act upon the adverse information furnished in Kroll s consumer reports without providing pre-adverse action notice to Plaintiff and other consumer applicants. ORIGINAL COMPLAINT -
Case :-cv-00-r-jpr Document Filed 0// Page of Page ID #: 0 0. The Taleo applicant tracking system shows that on April,, at approximately :0 p.m., US Foods determined that Plaintiff failed the background check and at approximately : p.m., US Foods rescinded Plaintiff s offer of employment. No pre-adverse action notice compliant with the FCRA was ever provided to Plaintiff before US Foods took the adverse action of rescinding Plaintiff s offer of employment.. On the same day at approximately : p.m., after it had deemed Plaintiff as disqualified for employment and rescinded his offer, US Foods employee tracking system automatically sent a rejection letter to Plaintiff.. The same system did not automatically provide Plaintiff with a preadverse action notice as required under U.S.C. b(b(. VI. CLASS ACTION ALLEGATIONS. US Foods practices and procedures described herein affected and continue to affect Plaintiff and other consumers who have been subject to an adverse employment action based on information in consumer reports.. Plaintiff asserts his Count claim for himself and the following putative Class: All natural persons residing in the United States (including all territories and other political subdivisions of the United States (a who submitted an employment application or other request for placement to US Foods, (b who were the subject of a consumer report which was used by US Foods or its agent to make an employment decision regarding such person during the FCRA statute of limitations period, U.S.C. p, (c for whom that decision was a rejection or a denial of employment, and (d who were not provided a copy of that consumer report and/or the mandatory disclosures required in U.S.C. b(b before that employment decision.. Numerosity: The Class is so numerous that joinder of all members is impracticable. US Foods is a nationwide employer that regularly obtains and uses information in consumer reports to conduct background checks on prospective employees, and frequently relies on such information, in whole or in ORIGINAL COMPLAINT -
Case :-cv-00-r-jpr Document Filed 0// Page of Page ID #: 0 part, as a basis for adverse employment actions. Plaintiff is informed and believes that, during the relevant time period, US Foods failed to provide preadverse action or adverse action notices to thousands of job applicants. The numerosity of the proposed class satisfies the definition of the Putative class.. Typicality: Plaintiff s claims are typical of the claims of the Class, which all arise from the same operative facts and are based on the same legal theories. US Foods typically uses consumer reports to conduct background checks on job applicants. US Foods routinely takes adverse employment actions based in whole or in part on the contents of consumer reports, and denies employment to job applicants who do not receive positive adjudication. Finally, US Foods regularly fails to provide pre-adverse action notices to these consumers prior to the taking of adverse action. The FCRA violations suffered by Plaintiff are typical of those suffered by other Putative Class Members, and US Foods treated Plaintiff consistently with other Putative Class Members in accordance with its standard policies and practices.. Commonality: Common questions of law and fact exist as to all members of the Class and predominate over any questions solely affecting individual members of the Class, including but not limited to: a. Whether US Foods violated U.S.C. b(b((a by failing to provide pre-adverse action notices to consumers before taking adverse action, in whole or in part, based on consumer reports; b. Whether US Foods violations of the FCRA were willful; c. The proper measure of statutory damages; and d. The proper measure of punitive damages.. Adequacy: Plaintiff will fairly and adequately protect the interests of the Class, as he has no conflicts with members of the Proposed Class. Plaintiff ORIGINAL COMPLAINT -
Case :-cv-00-r-jpr Document Filed 0// Page of Page ID #: 0 will also vigorously litigate this matter in the interest of protecting his claims and those of Class Members. Further, Plaintiff has retained counsel experienced in complex class action land FCRA litigation.. Class certification is appropriate under Federal Rule of Civil Procedure (b( because questions of law and fact common to the Class predominate over any questions affecting only individual members of the Class, and because a class action is superior to other available methods for the fair and efficient adjudication of this litigation. US Foods conduct described in this Complaint stems from common and uniform policies and practices, resulting in common violations of the FCRA. Class certification also will obviate the need for unduly duplicative litigation that might result in inconsistent judgments concerning Defendant s practices. Moreover, management of this action as a class action will not present any likely difficulties. In the interests of justice and judicial efficiency, it would be desirable to concentrate the litigation of all Class Members claims in a single forum. 0. Plaintiff intends to send notice to all members of the Classes to the extent required by Rule. The names and addresses of the Class Members are available from Defendant s records. VII. CLAIM FOR RELIEF Count I Failing to Provide Proper Notice Before Taking of Adverse Employment Action U.S.C. b(b((a. Plaintiff re-alleges and incorporates each of the foregoing paragraphs as though fully set forth herein.. US Foods used a consumer report, as defined by the FCRA, to take adverse employment action against Plaintiff and other members of the Putative Class. ORIGINAL COMPLAINT -
Case :-cv-00-r-jpr Document Filed 0// Page 0 of Page ID #:0 0. US Foods violated the FCRA by failing to provide Plaintiff and other Putative Class Members, prior to taking adverse action, with notice of its intent to take adverse action based in whole or in part on a consumer report, along with a copy of the consumer report and a written summary of the consumers FCRA rights.. The foregoing violations were willful. Defendants acted in deliberate or reckless disregard of its obligations and the rights of Plaintiff and other Class Members under U.S.C. b(b((a. The willfulness of Defendants conduct is reflected by, among other things, the following facts: a. Based on the plain language of the statute, legal advice provided by its own general counsel or outside employment counsel, caselaw interpreting the operative FCRA provisions, and published FTC and CFPB guidance, US Foods knew or should have known that its failure to provide pre-adverse action notice was unlawful; b. Plaintiff is informed and believes, and thereon alleges that, prior to obtaining consumer reports from Kroll, U.S. Foods certified, in its service agreement with Kroll, that it would provide consumers with pre-adverse action notices compliant with U.S.C. b(b(. c. In direct violation of the certification as well as U.S.C. b(b(, U.S. Foods routinely and systematically fails to provide consumers with pre-adverse action notice. d. US Foods could have complied with the statutory duty to provide a pre-adverse action notice by sending the notice directly to the affected consumer job applicant before taking the adverse action; ORIGINAL COMPLAINT - 0
Case :-cv-00-r-jpr Document Filed 0// Page of Page ID #: 0 e. Despite the clear notice of the law, full ability to comply, and ample opportunity, US Foods failed to adopt any measure which would have provided the required notice to Plaintiff and the Class; and f. The language of the statute is clear and unambiguous, and the timing requirement is specific. By taking adverse actions without first providing notice to consumers as the FCRA requires and instead mailing the pre-adverse action notice after a final adverse action has taken place, US Foods has adopted a practice that is at least a reckless interpretation of the statute.. Due to these willful violations, Plaintiff and the Putative Class are entitled to statutory damages of not less than $00 and not more than $,000 for each and every one of these violations, pursuant to U.S.C. n(a((a.. Plaintiff and the Putative Class are further entitled to recover their costs and attorneys, fees, pursuant to U.S.C. n(a(. VIII. PRAYER FOR RELIEF. WHEREFORE, Plaintiff, on behalf of himself and the Class, prays for relief as follows: a. Determining that this action may proceed as a class action under Rule of the Federal Rules of Civil Procedure; b. Designating Plaintiff as Class Representative and designating Plaintiff s Counsel as counsel for the Class; c. Issuing proper notice to the Class at US Foods expense; d. Declaring that US Foods committed multiple, separate violations of the FCRA; ORIGINAL COMPLAINT -
Case :-cv-00-r-jpr Document Filed 0// Page of Page ID #: 0 e. Declaring that US Foods acted willfully, in deliberate or reckless disregard of Plaintiff s and the Class s rights and US Foods obligations under the FCRA; FCRA; f. Awarding statutory and punitive damages as provided by the g. Awarding injunctive and equitable relief as may be proper; h. Awarding reasonable attorneys fees and costs as provided by the FCRA; and i. Granting other and further relief, in law or equity, as this Court may deem appropriate and just. IX. DEMAND FOR JURY TRIAL. Pursuant to Rule (b of the Federal Rules of Civil Procedure, Plaintiff and the Class demand a trial by jury. April, Respectfully submitted, /s/ Michael A. Caddell Michael A. Caddell (SBN mac@caddellchapman.com Cynthia B. Chapman (SBN Craig C. Marchiando (SBN CADDELL & CHAPMAN Lamar Street, Suite 00 Houston, TX 00 Phone: ( - Fax: ( -00 Joshua E. Kim, Esq. (SBN 0 joshua@anewwayoflife.org A NEW WAY OF LIFE REENTRY PROJECT P.O. Box Los Angeles, California 00 Ph: ( - Fax: ( - ORIGINAL COMPLAINT -
Case :-cv-00-r-jpr Document Filed 0// Page of Page ID #: 0 Devin H. Fok, Esq. (SBN devin@devinfoklaw.com THE LAW OFFICE OF DEVIN H. FOK P.O. Box Alhambra, CA 0- Ph: (0 0- Fax: ( - Attorneys for Plaintiff Donald Acosta ORIGINAL COMPLAINT -