Preview
1 POTTER HANDY LLP
Mark D. Potter (SBN 166317)
2 mark@potterhandy.com
James M. Treglio (SBN 228077)
3
jimt@potterhandy.com
4 100 Pine St., Ste 1250
San Francisco, CA 94111
5 (415) 534-1911
Fax: (888) 422-5191
6
Attorneys for Plaintiffs and the Putative Class
7
IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
8
FOR THE COUNTY OF LOS ANGELES
9
EUGENE HOWARD and ROBERT CASE NO:
10 WILLIAMS, individually and on behalf of all
others similarly situated, CLASS ACTION COMPLAINT FOR:
11
Plaintiffs, (1) VIOLATIONS OF FAIR CREDIT
12
REPORTING ACT, 15 U.S.C.
13 v. §1681b(b)(2);
(2) VIOLATIONS OF FAIR CREDIT
14 SELECT SOURCE INTERNATIONAL, REPORTING ACT, 15 U.S.C.
§1681b(b)(3);
15 INC., a Minnesota corporation; STERLING (3) VIOLATIONS OF CALIFORNIA
CHECK CORP., a Delaware corporation; and INVESTIGATIVE CONSUMER
16 DOES 1 to 100, inclusive REPORTING AGENCIES ACT, CAL.
CIVIL CODE §1786, ET. SEQ.; AND
17 Defendants. (4) VIOLATIONS OF LABOR CODE
SECTION 432.7
18
DEMAND FOR JURY TRIAL
19
20 Plaintiffs Eugene Howard and Robert Williams (“Plaintiffs”), on behalf of themselves, the
21 State of California, and all others similarly situated (hereinafter “Class Members”) complains and
22 alleges as follows:
23 OVERVIEW OF CLAIMS
24 1. Plaintiffs bring this action on behalf of themselves and all others similarly situated,
25 as a class action complaint against Defendants SELECT SOURCE INTERNATIONAL, INC.
26 (“Select Source” and/or “Defendant”), STERLING CHECK CORP. (“Sterling”), and DOES 1 to
27 100 (collectively “Defendants”) for requiring Plaintiffs and their fellow applicants to undergo
28
PLAINTIFFS’ CLASS ACTION COMPLAINT
1
1 background checks in violation of the (1) Fair Credit Reporting Act (“FCRA”); (2) Investigative
2 Consumer Reporting Agencies Act (“ICRAA”); and (3) Labor Code Section 432.7, relying on a
3 conviction that is more than seven (7) years old in a hiring decision. As a result of the foregoing,
4 Defendants have violated California statutory laws as described below.
5 2. The “Class Period” is designated as the period from four years prior to the filing of
6 this Complaint trough the trial date. Defendants’ violations of the FCRA and ICRAA, as described
7 more fully below, have been ongoing throughout the Class Period.
8 VENUE
9 3. Venue is proper in this county under section 395.5 of the California Code of Civil
10 Procedure. Many, if not all, of the putative Class Members applied with, were employed by,
11 and/or performed work for Defendants in Los Angeles County during the Class Period. Many of
12 the acts alleged herein including Defendants’ background checks done in violation of the law
13 occurred in Los Angeles County. Venue is therefore proper in Los Angeles County.
14 JURISDICTION
15 4. Defendant SELECT SOURCE INTERNATIONAL, INC. is within the jurisdiction
16 of this Court. Defendants transact millions of dollars as provider of a full range of consulting,
17 implementation, and integration services that increase business productivity. Select Source offers a
18 wide range of customized staffing solutions for its customers. Thus, Defendants have obtained the
19 benefits of the laws of the State of California.
20 5. Defendant STERLING CHECK CORP. is within the jurisdiction of this Court.
21 Defendants transact millions of dollars as a background check company. Sterling offers a wide
22 range of customized background check solutions for its customers. Thus, Defendants have
23 obtained the benefits of the laws of the State of California.
24 THE PARTIES
25 A. The Plaintiffs
26 6. Plaintiff Howard is a California resident and in or about August 2022, he applied
27 for a job with Defendant. At all relevant times, Plaintiff was subjected to background checks that
28
PLAINTIFFS’ CLASS ACTION COMPLAINT
2
1 violated the law.
2 7. Plaintiff Williams is a California resident and in or about June 2022, he applied for
3 a job with Defendant. At all relevant times, Plaintiff was subjected to background checks that
4 violated the law.
5 8. Plaintiffs are members of, and seek to represent the following class: “All natural
6 persons with an address in the United States and its Territories beginning two years prior to the
7 filing of this Complaint and continuing through the resolution of this action (1) who applied for
8 employment with Select Source, or its predecessor or merged entities, as hourly employees, (2)
9 who are or were required to undergo a background check with Sterling as part of their application
10 process during the Class Period, and were denied employment without being provided with a copy
11 of their consumer report and a summary of rights under the FCRA.” (“The Applicant Class” or the
12 “Class” or “Class Members).
13 B. The Defendants
14 9. Defendant Select Source International, Inc. is a Minnesota corporation
15 headquartered in Minnetonka, Minnesota. It is a provider of a full range of consulting,
16 implementation, and integration services that increase business productivity. Select Source offers a
17 wide range of customized staffing solutions for its customers. It collects information, compiles
18 consumer reports, and conducts background checks on applicants like Plaintiffs and the Class
19 Members.
20 10. Defendant Sterling Check Corp. is a Delaware corporation headquartered in New
21 York, New York. It offers a full range of background check services and solutions to its customers.
22 It collects information, compiles consumer reports, and conducts background checks on applicants
23 like Plaintiffs and the Class Members.
24 11. The true names and capacities, whether individual, corporate, associate, or
25 otherwise, of Defendants sued herein as DOES 1 to 50, inclusive, are currently unknown to
26 Plaintiffs, who therefore sue Defendants by such fictitious names under Code of Civil Procedure §
27 474. Plaintiffs are informed and believe, and based thereon allege, that each of the Defendants
28
PLAINTIFFS’ CLASS ACTION COMPLAINT
3
1 designated herein as a DOE is legally responsible in some manner for the unlawful acts referred to
2 herein. Plaintiffs will seek leave of court to amend this Complaint to reflect the true names and
3 capacities of the Defendants designated hereinafter as DOES when such identities become known.
4 12. Plaintiffs are informed and believe, and based thereon allege, that each Defendant
5 acted in all respects pertinent to this action as the agent of the other Defendants, carried out a joint
6 scheme, business plan or policy in all respects pertinent hereto, and the acts of each Defendant are
7 legally attributable to the other Defendants. Furthermore, Defendants in all respects acted as the
8 employer and/or joint employer of Plaintiffs and the Class Members.
9 13. California courts have recognized that the definition of “employer” for purposes of
10 enforcement of the California Labor Code goes beyond the concept of traditional employment to
11 reach irregular working arrangements for the purpose of preventing evasion and subterfuge of
12 California’s labor laws. Martinez v. Combs (2010) 49 Cal. 4th 35, 65. As such, anyone who
13 directly or indirectly, or through an agent or any other person, engages, suffers, or permits any
14 person to work or exercises control over the wages, hours, or working conditions of any person,
15 may be liable for violations of the California Labor Code as to that person. Cal. Labor Code §§558
16 and 558.1.
17 14. California law also permits and recognizes the piercing of a corporate veil between
18 sister companies and under the single enterprise rule. Hasso v. Hapke (2014) 227 Cal. App. 4th
19 107, 155; Greenspan v. LADT, LLC (2010) 191 Cal. App. 4th 486, 512. The single enterprise rule
20 applies where “there are two or more personalities, there is but one enterprise; and that this
21 enterprise has been so handled that it should respond, as a whole, for the debts of certain
22 component elements of it.” Hasso 227 Cal. App. 4th at 155; Greenspan, 191 Cal. App. 4th at 512.
23 FACTUAL ALLEGATIONS
24 15. Plaintiffs and the Class are and were employed by and/or applicants of Select
25 Source International, Inc., a Minnesota corporation headquartered in Minnetonka, Minnesota.
26 Select Source is a provider of a full range of consulting, implementation, and integration services
27 that increase business productivity. It offers a wide range of customized staffing solutions for its
28
PLAINTIFFS’ CLASS ACTION COMPLAINT
4
1 customers.
2 16. In or about August 2022, Plaintiff Howard was considered by Select Source for a
3 software engineer position. After providing Defendant with all the information it required for the
4 application, Plaintiff Howard was asked by Select Source to confirm if he had any felonies. Select
5 Source also informed Plaintiff Howard that it needed a waiver from him since Sterling, the
6 consumer reporting agency that Select Source hired, ran a 15-year background check, also known
7 as a consumer report, or an investigative consumer report, on Plaintiff Howard.
8 17. On or about September 27, 2022, Plaintiff Howard sent an email to Select Source
9 requesting for an update on his application. Select Source replied that while Plaintiff Howard was
10 shortlisted for the position, someone else was hired to fill in the job. Plaintiff Howard was also
11 advised by Select Source to make himself available in the job boards.
12 18. Aware that an illegal background check was conducted on him and hoping that the
13 same problem will not happen again in the future, Plaintiff Howard asked Select Source for a copy
14 of the consent form to conduct background checks used by Select Source. Select Source then
15 informed Plaintiff Howard that what it needed was a confirmation from Plaintiff Howard that he
16 does not have any felony or criminal records which would prevent Select Source from hiring him.
17 19. Realizing that Select Source probably considered Plaintiff Howard’s past criminal
18 conviction which was dismissed pursuant to Penal Code §1203.4, in its hiring decision, Plaintiff
19 Howard told Select Source that the confirmation it required from Plaintiff Howard would be
20 against the law. Select Source’s only reply to Plaintiff was that it would no longer proceed with his
21 application and/or employment.
22 20. With regard to Plaintiff Williams, he was offered an IT support technician position
23 by Select Source. Plaintiff Williams was given a start date, pay rate, and work schedule by Select
24 Source, contingent upon his successful passing of a drug test and criminal background check.
25 21. After a background check was conducted by Sterling on Plaintiff Williams with
26 purposeful misinformation attached to the background report, Select Source rescinded its job offer
27 to Plaintiff Williams.
28
PLAINTIFFS’ CLASS ACTION COMPLAINT
5
1 22. In its background report on Plaintiff Williams, Sterling noted an arrest from 2019
2 that was dismissed but was maliciously classified by Sterling as a conviction that resulted in a year
3 of incarceration, three years of supervised adult probation, and specific dollar amounts in court
4 fines and restitution, which misinformation ultimately caused Select Source to take back its earlier
5 offer of employment to Plaintiff Williams.
6 23. The Superior Court case number relied upon by Sterling in its background report on
7 Plaintiff Williams clearly show a dismissal and makes absolutely no mention of a conviction, jail
8 time, probation, restitutions, and/or court fines. These were all factors Sterling created and
9 interjected into Plaintiff Williams’ background report, which cost Plaintiff Williams his job offer.
10 24. Defendants never asked Plaintiffs to sign any authorization to run a background
11 check. Defendants never provided Plaintiffs with copies of their background checks and/or
12 consumer reports. Rather than provide Plaintiffs with an opportunity to respond to items contained
13 within the consumer reports, Defendants immediately chose not to proceed with Plaintiffs’
14 applications and/or employments. Plaintiffs were not provided with a copy of their consumer
15 reports, or a summary of rights under the Fair Credit Reporting Act (“FCRA”).
16 25. Labor Code section 432.7 specifies that an employer may not gather information, or
17 utilize information collected from any source regarding any conviction dismissed pursuant to Penal
18 Code section 1203.4. Specifically, section (a)(1) of the statute states:
19 An employer, whether a public agency or private individual or corporation, shall not
ask an applicant for employment to disclose, through any written form or verbally,
20 information concerning an arrest or detention that did not result in conviction, or
information concerning a referral to, and participation in, any pretrial or posttrial
21
diversion program, or concerning a conviction that has been judicially dismissed or
22 ordered sealed pursuant to law, including, but not limited to, Sections 1203.4, 1203.4a,
1203.425, 1203.45, and 1210.1 of the Penal Code. An employer also shall not seek
23 from any source whatsoever, or utilize, as a factor in determining any condition of
employment including hiring, promotion, termination, or any apprenticeship training
24 program or any other training program leading to employment, any record of arrest or
25 detention that did not result in conviction, or any record regarding a referral to, and
participation in, any pretrial or posttrial diversion program, or concerning a conviction
26 that has been judicially dismissed or ordered sealed pursuant to law, including, but not
limited to, Sections 1203.4, 1203.4a, 1203.425, 1203.45, and 1210.1 of the Penal Code.
27 This section shall not prevent an employer from asking an employee or applicant for
employment about an arrest for which the employee or applicant is out on bail or on
28 their own recognizance pending trial.
PLAINTIFFS’ CLASS ACTION COMPLAINT
6
1
26. By relying on information regarding a conviction which had been dismissed with
2
regard to Plaintiff Williams, Defendant Select Source violated Labor Code §432.7. Further,
3
Defendant Sterling violated the ICRAA by reporting convictions older than seven years, and which
4
had been dismissed.
5
27. The FCRA was enacted in 1970, became effective on April 25, 1971, and has been
6
in force since that date. The Fair and Accurate Credit Transactions Act amended the FCRA in
7
December 2003, and the Dodd-Frank Act amended the FCRA in July 2010.
8
28. All background checks are defined as consumer reports under the FCRA.
9
Specifically, the FCRA defines a consumer report as:
10
In general.—The term “consumer report” means any written, oral, or other
11 communication of any information by a consumer reporting agency
bearing on a consumer’s credit worthiness, credit standing, credit capacity,
12
character, general reputation, personal characteristics, or mode of living
13 which is used or expected to be used or collected in whole or in part for
the purpose of serving as a factor in establishing the consumer’s eligibility
14 for—
(A) credit or insurance to be used primarily for personal, family, or
15 household purposes;
(B)employment purposes; or
16
(C) any other purpose authorized under section 1681b of this title.
17
15 U.S.C. 1681a(d)(1).
18
29. As stated above, Plaintiffs were subjected by Defendants to a background check in
19
relation to Defendants’ offer of employment. However, Defendants violated the FCRA by not
20
providing Plaintiffs with the disclosures to perform consumer reports. Defendants also failed to
21
provide Plaintiffs with adequate time to review the background check for accuracy.
22
30. The Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681b(b)(2) provides:
23
(b)Conditions for furnishing and using consumer reports for employment purposes
24 (2)Disclosure to consumer
(A)In general
25 Except as provided in subparagraph (B), a person may not procure a consumer report,
26 or cause a consumer report to be procured, for employment purposes with respect to
any consumer, unless—
27 (i)a clear and conspicuous disclosure has been made in writing to the consumer at any
time before the report is procured or caused to be procured, in a document that consists
28 solely of the disclosure, that a consumer report may be obtained for employment
PLAINTIFFS’ CLASS ACTION COMPLAINT
7
1 purposes; and
(ii)the consumer has authorized in writing (which authorization may be made on the
2 document referred to in clause (i)) the procurement of the report by that person.
3
31. Indeed, Courts have held that providing FCRA disclosure forms as part of
4
employment applications violates the FCRA. E.E.O.C. v. Video Only, Inc., 2008 WL 2433841 at
5
*11 (D. Or. June 11, 2008) (granting summary judgment against the defendant employer who
6
made a disclosure as a part of the job application, which is not a document consisting solely of the
7
disclosure); Rubio-Delgado v. Aerotek, Inc., 2015 WL 3623627, at *1 (N.D. Cal. June 10, 2015)
8
(“Employers also violate the FCRA if they provide the required disclosure in a document that does
9
not consist solely of the disclosure, such as when the disclosure is integrated as part of a job
10
application.”).
11
32. Indeed, the inclusion of any extraneous information, including information related
12
to the disclosure, violates the FCRA. In Syed v. M-I, LLC, 853 F.3d 492 (9th Cir. 2017), the 9th
13
Circuit held that the employer violated this provision when it included a liability waiver in the
14
disclosure. See Moody v. Ascenda USA, 2016 WL 4702681 (S.D. Fla. July 1, 2016) (holding that
15
inclusion of a waiver in an authorization and disclosure form violates 15 U.S.C. 15 U.S.C. §
16
1681b(b)(2)(A)) (“the Court will align itself with the district courts that have held that inclusion of
17
a waiver within the disclosure document is sufficient to state a violation of § 1681b(b)(2)(A)(i).”);
18
See Milbourne v. JRK Residential Am., LLC, 92 F. Supp. 3d 425, 433 (E.D. Va. 2015) (holding
19
that the inclusion of a waiver within a document containing the disclosure would violate 15 U.S.C.
20
§1681b(b)(2)(A)) (“[A]lthough the policy goal of the FCRA may have been to secure clear
21
disclosures to consumers, it does so in part by including language that requires the disclosure to be
22
in its own separate document.”); Reardon v. Closetmaid Corp., 2013 WL 6231606 at *10-11
23
(W.D. Pa. Dec. 2, 2013) (holding that a disclosure with a liability waiver was contrary to the
24
statute).
25
33. If the mere inclusion of the authorization and disclosure forms as part of
26
employment applications and the inclusion of any extraneous information therein constitute
27
violations of the FCRA, then all the more that Defendants’ acts of running a background check on
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PLAINTIFFS’ CLASS ACTION COMPLAINT
8
1 Plaintiffs that go farther back than seven (7) years and without giving them any opportunity to
2 review the consumer report for accuracy violate the FCRA.
3 34. The FCRA limits the use of the report to make adverse actions against the
4 employee, stating that an employer cannot take adverse action against the employee unless the
5 employer does the following:
6 in using a consumer report for employment purposes, before taking any
adverse action based in whole or in part on the report, the person intending
7 to take such adverse action shall provide to the consumer to whom the
report relates—
8
(i) a copy of the report; and
9 (ii) a description in writing of the rights of the consumer under this
subchapter, as prescribed by the Bureau under section 1681g(c)(3)(1) of
10 this title.
11 15 U.S.C. §1681b(b)(3)(A)(i) and (ii).
12 35. Prior to its decision to terminate and rescind Plaintiffs’ applications and/or
13 employments, Defendants did not provide Plaintiffs or the Applicant Class with a copy of their
14 consumer reports, and did not provide them with a summary of their rights under the FCRA.
15 36. In addition to the FCRA, the ICRAA, Cal. Civil Code §1786, et. seq., provides
16 protections to employees who undergo a background check (called an investigative consumer
17 report by the statute), for employment purposes. Like the FCRA, the ICRAA requires that an
18 employer who undertakes an adverse action against the employee based on items contained in the
19 background check provide the employee with a copy of the background check, along with a
20 summary of rights under the ICRAA. Cal. Civil Code §1786.40. The report and the summary of
21 rights must be provided before any adverse action can be undertaken.
22 37. Further, the ICRAA Cal. Civil Code § 1786.18(a)(7) provides that: “(a) Except as
23 authorized under subdivision (b), an investigative consumer reporting agency may not make or
24 furnish any investigative consumer report containing any of the following items of information: …
25 (7) Records of arrest, indictment, information, misdemeanor complaint, or conviction of a crime
26 that, from the date of disposition, release, or parole, antedate the report by more than seven years.
27 …”
28
PLAINTIFFS’ CLASS ACTION COMPLAINT
9
1 38. As stated above, Defendants relied on convictions that were more than seven (7)
2 years old in their hiring decision. Defendants also did not provide Plaintiffs with copies of their
3 background report and a summary of their rights under the ICRAA prior to Defendants
4 undertaking an adverse action against them. Nor did Defendants provide Plaintiffs with the
5 consumer reporting agencies’ proper phone number and address, or inform them of the office
6 hours upon which they could inspect the investigative consumer report at their offices. Thus,
7 Defendants violated the ICRAA.
8 39. At all relevant times, Defendants were aware and have knowledge of the
9 requirements of the FCRA and the ICRAA.
10 40. Indeed, even if Defendants were not initially aware of the requirements of the FCRA
11 and ICRAA, Defendants, in obtaining consumer reports, investigative consumer reports, and
12 consumer credit reports on Plaintiffs and the Class Members, utilized consumer reporting agencies
13 which are prohibited from providing such reports to Defendants without first obtaining a
14 certification that Defendants would comply with the FCRA and ICRAA. 15 U.S.C. §1681b(b)(2);
15 Civil Code §1786.12(e).
16 41. As such, Plaintiffs and the Class Members were unlawfully required to undergo
17 investigative consumer reports as a consequence of their employment, in direct violation of Civil
18 Code §1786.16, and 15 U.S.C. §1681b(b)(2) and (3).
19 CLASS ACTION ALLEGATIONS
20 42. Plaintiffs bring this action, on behalf of themselves and all others similarly situated,
21 as a class action pursuant to Code of Civil Procedure § 382.
22 43. Plaintiffs are members of, and seek to represent the following class: “All natural
23 persons with an address in the United States and its Territories beginning two years prior to the
24 filing of this Complaint and continuing through the resolution of this action (1) who applied for
25 employment with Select Source, or its predecessor or merged entities, as hourly employees, (2)
26 who are or were required to undergo a background check with Sterling as part of their application
27 process during the Class Period, and were denied employment without being provided with a copy
28
PLAINTIFFS’ CLASS ACTION COMPLAINT
10
1 of their consumer report and a summary of rights under the FCRA.”
2 44. This action has been brought and may properly be maintained as a class action
3 under Code of Civil Procedure § 382 because there is a well-defined community of interest in the
4 litigation, the proposed class is easily ascertainable, and Plaintiffs are proper representatives of the
5 Class:
6 a. Numerosity: The potential members of the Class as defined are so
7 numerous that joinder of all the members of the Class is impracticable. While the precise number
8 of Class Members has not been determined at this time, Plaintiffs are informed and believe that
9 Defendants have, on average, during the Class Period employed over 200 Class Members. The
10 Class Members are dispersed throughout the United States. Joinder of all members of the
11 proposed classes is therefore not practicable.
12 b. Commonality: There are questions of law and fact common to Plaintiffs and
13 the Class that predominate over any questions affecting only individual members of the Class.
14 These common questions of law and fact include, without limitation:
15 i. Whether Defendants required Plaintiffs and the Applicant Class Members to
16 undergo consumer reports as defined by the FCRA;
17 ii. Whether Defendants rescinded the application and/or employment of
18 Plaintiffs and the Applicant Class Members based on items contained within those consumer
19 reports;
20 iii. Whether Defendants provided Plaintiffs and members of the Applicant
21 Class with notifications that contained the consumer reports they relied upon in making adverse
22 employment decisions, such as rescission of an application and/or employment offer, as required
23 by 15. U.S.C. 1681b(b)(3);
24 iv. Whether Defendants provided Plaintiffs and members of the Applicant
25 Class with notifications of adverse employment action prior to making the adverse employment
26 action that contained the summary of rights under the FCRA as required by 15 U.S.C. 1681b(b)(3);
27 v. Whether Defendants obtained, and relied upon, information of convictions
28
PLAINTIFFS’ CLASS ACTION COMPLAINT
11
1 that were more than seven years old;
2 vi. Whether Defendants received or relied upon information concerning
3 convictions that were more than seven years old in making hiring decisions with regard to
4 Plaintiffs and the Class;
5 vii. The proper formula(s) for calculating damages, interest, and restitution
6 owed to Plaintiffs and the Class Members;
7 viii. The nature and extent of class-wide damages.
8 c. Typicality: Plaintiffs’ claims are typical of the claims of the Class. Both
9 Plaintiffs and Class Members sustained injuries and damages, and were deprived of property
10 rightly belonging to them, arising out of and caused by Defendants’ common course of conduct in
11 violation of law as alleged herein, in similar ways and for the same types of unlawful background
12 checks.
13 d. Adequacy of Representation: Plaintiffs are members of the Class and will
14 fairly and adequately represent and protect the interests of the Class and Class Members.
15 Plaintiffs’ interests do not conflict with those of Class and Class Members. Counsels who
16 represent Plaintiffs are competent and experienced in litigating large wage and hour class actions,
17 and other employment class actions, and will devote sufficient time and resources to the case and
18 otherwise adequately represent the Class and Class Members.
19 e. Superiority of Class Action: A class action is superior to other available
20 means for the fair and efficient adjudication of this controversy. Individual joinder of all Class
21 Members is not practicable, and questions of law and fact common to the Class predominate over
22 any questions affecting only individual members of the Class. Each Class Member has been
23 damaged or may be damaged in the future by reason of Defendants’ unlawful policies and/or
24 practices. Certification of this case as a class action will allow those similarly situated persons to
25 litigate their claims in the manner that is most efficient and economical for the parties and the
26 judicial system. Certifying this case as a class action is superior because it allows for efficient and
27 full disgorgement of the ill-gotten gains Defendants have enjoyed by maintaining its unlawful
28
PLAINTIFFS’ CLASS ACTION COMPLAINT
12
1 background check policies and will thereby effectuate California’s strong public policy of
2 protecting employees. If this action is not certified as a Class Action, it will be impossible as a
3 practical matter, for many or most Class Members to bring individual actions to recover damages
4 for the unlawful background checks conducted by Defendants, due to the relatively small amounts
5 of such individual recoveries relative to the costs and burdens of litigation.
6 FIRST CAUSE OF ACTION
FOR VIOLATION OF THE FEDERAL CREDIT REPORTING ACT
7
(Violation of 15 U.S.C. §§ 1681b(b)(2)
8 (On Behalf of Plaintiffs and the Applicant Class against Defendant Select Source)
9 45. Plaintiffs allege and incorporate by this reference the allegations in all preceding
10 paragraphs.
11 46. Defendant Select Source can be defined as a “person” under 15 U.S.C § 1681a(b) of
12 the FCRA. It obtained and used consumer reports of its employees and job applicants for
13 employment purposes. Plaintiffs and the Class “consumers” as defined by 15 U.S.C § 1681a(c)
14 because they are individuals. At all relevant times, Plaintiffs and the Class Members applied for
15 employment with Defendants.
16 47. As stated above, Plaintiffs were subjected by Select Source to a background check
17 in relation to their offer of employment. However, Select Source violated the FCRA by not
18 providing Plaintiffs with the disclosures to perform consumer reports. Select Source also failed to
19 provide Plaintiffs with adequate time to review the background check for accuracy.
20 48. The Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681b(b)(2) provides:
21 (b)Conditions for furnishing and using consumer reports for employment purposes
22 (2)Disclosure to consumer
(A)In general
23 Except as provided in subparagraph (B), a person may not procure a consumer report,
or cause a consumer report to be procured, for employment purposes with respect to
24 any consumer, unless—
(i)a clear and conspicuous disclosure has been made in writing to the consumer at any
25 time before the report is procured or caused to be procured, in a document that consists
26 solely of the disclosure, that a consumer report may be obtained for employment
purposes; and
27 (ii)the consumer has authorized in writing (which authorization may be made on the
document referred to in clause (i)) the procurement of the report by that person.
28
PLAINTIFFS’ CLASS ACTION COMPLAINT
13
1 49. Indeed, Courts have held that providing FCRA disclosure forms as part of
2 employment applications violates the FCRA. E.E.O.C. v. Video Only, Inc., 2008 WL 2433841 at
3 *11 (D. Or. June 11, 2008) (granting summary judgment against the defendant employer who
4 made a disclosure as a part of the job application, which is not a document consisting solely of the
5 disclosure); Rubio-Delgado v. Aerotek, Inc., 2015 WL 3623627, at *1 (N.D. Cal. June 10, 2015)
6 (“Employers also violate the FCRA if they provide the required disclosure in a document that does
7 not consist solely of the disclosure, such as when the disclosure is integrated as part of a job
8 application.”).
9 50. Indeed, the inclusion of any extraneous information, including information related
10 to the disclosure, violates the FCRA. In Syed v. M-I, LLC, 853 F.3d 492 (9th Cir. 2017), the 9th
11 Circuit held that the employer violated this provision when it included a liability waiver in the
12 disclosure. See Moody v. Ascenda USA, 2016 WL 4702681 (S.D. Fla. July 1, 2016) (holding that
13 inclusion of a waiver in an authorization and disclosure form violates 15 U.S.C. 15 U.S.C. §
14 1681b(b)(2)(A)) (“the Court will align itself with the district courts that have held that inclusion of
15 a waiver within the disclosure document is sufficient to state a violation of § 1681b(b)(2)(A)(i).”);
16 See Milbourne v. JRK Residential Am., LLC, 92 F. Supp. 3d 425, 433 (E.D. Va. 2015) (holding
17 that the inclusion of a waiver within a document containing the disclosure would violate 15 U.S.C.
18 §1681b(b)(2)(A)) (“[A]lthough the policy goal of the FCRA may have been to secure clear
19 disclosures to consumers, it does so in part by including language that requires the disclosure to be
20 in its own separate document.”); Reardon v. Closetmaid Corp., 2013 WL 6231606 at *10-11
21 (W.D. Pa. Dec. 2, 2013) (holding that a disclosure with a liability waiver was contrary to the
22 statute).
23 51. If the mere inclusion of the authorization and disclosure forms as part of
24 employment applications and the inclusion of any extraneous information therein constitute
25 violations of the FCRA, then all the more that Select Source’s acts of running a background check
26 on Plaintiffs that go farther back than seven (7) years and without giving them any opportunity to
27 review the consumer report for accuracy violate the FCRA.
28
PLAINTIFFS’ CLASS ACTION COMPLAINT
14
1 52. As a result of such conduct, Plaintiffs and the Applicant Class are entitled to
2 statutory damages of not less than $100 and not more than $1,000 for each and every one of these
3 violations pursuant to 15 U.S.C. §1681n(a)(1)(A).
4 53. As a result of such conduct, Plaintiffs and the Applicant Class are further entitled
5 to recover their attorneys’ fees and costs pursuant to 15 U.S.C. § 1681n(a)(3).
6 SECOND CAUSE OF ACTION
FOR VIOLATION OF THE FEDERAL CREDIT REPORTING ACT
7 (Violation of 15 U.S.C. §§ 1681b(b)(3)
8 (On Behalf of Plaintiffs and the Applicant Class against Defendant Select Source)
9 54. Plaintiffs allege and incorporate by this reference the allegations in all preceding
10 paragraphs.
11 55. Defendant Select Source can be defined as a “person” under 15 U.S.C § 1681a(b) of
12 the FCRA. It obtained and used consumer reports of its employees and job applicants for
13 employment purposes. Plaintiffs and the Class are “consumers” as defined by 15 U.S.C § 1681a(c)
14 because they are individuals. At all relevant times, Plaintiffs and the Class Members applied for
15 employment with Select Source.
16 56. The FCRA limits the use of the report to make adverse actions against the
17 employee, stating that an employer cannot take adverse action against the employee unless the
18 employer does the following:
19 in using a consumer report for employment purposes, before taking any
adverse action based in whole or in part on the report, the person intending
20
to take such adverse action shall provide to the consumer to whom the
21 report relates—
(i) a copy of the report; and
22 (ii) a description in writing of the rights of the consumer under this
subchapter, as prescribed by the Bureau under section 1681g(c)(3)(1) of
23 this title.
24
15 U.S.C. §1681b(b)(3)(A)(i) and (ii).
25
57. The FCRA also provides that:
26
(B)Application by mail, telephone, computer, or other similar means
27 (i)If a consumer described in subparagraph (C) applies for employment by
mail, telephone, computer, or other similar means, and if a person who has
28 procured a consumer report on the consumer for employment purposes takes
PLAINTIFFS’ CLASS ACTION COMPLAINT
15
1 adverse action on the employment application based in whole or in part on the
report, then the person must provide to the consumer to whom the report
2 relates, in lieu of the notices required under subparagraph (A) of this section
and under section 1681m(a) of this title, within 3 business days of taking such
3
action, an oral, written or electronic notification—
4 (I)that adverse action has been taken based in whole or in part on a
consumer report received from a consumer reporting agency;
5 (II)of the name, address and telephone number of the consumer reporting
agency that furnished the consumer report (including a toll-free telephone
6 number established by the agency if the agency compiles and maintains
files on consumers on a nationwide basis);
7
(III)that the consumer reporting agency did not make the decision to take
8 the adverse action and is unable to provide to the consumer the specific
reasons why the adverse action was taken; and
9 (IV)that the consumer may, upon providing proper identification, request a
free copy of a report and may dispute with the consumer reporting agency
10 the accuracy or completeness of any information in a report.
11 (ii)If, under clause (B)(i)(IV), the consumer requests a copy of a consumer
report from the person who procured the report, then, within 3 business days
12 of receiving the consumer’s request, together with proper identification, the
person must send or provide to the consumer a copy of a report and a copy of
13 the consumer’s rights as prescribed by the Bureau under section 1681g(c)(3) 1
of this title.
14
15 15 U.S.C. §1681b(b)(3)(B)(i) and (ii).
16 58. Prior to its decision to terminate and rescind Plaintiffs’ and the Applicant Class
17 Member’s application and/or employment, Select Source did not provide Plaintiffs or the
18 Applicant Class Members with copies of their consumer reports, and did not provide them with a
19 summary of their rights under the FCRA. Select Source did not provide Plaintiffs and the
20 Applicant Class with the notifications and reports required under the FCRA.
21 59. As a result of such conduct, Plaintiffs and the Applicant Class are entitled to
22 statutory damages of not less than $100 and not more than $1,000 for each and every one of these
23 violations pursuant to 15 U.S.C. §1681n(a)(1)(A).
24 60. As a result of such conduct, Plaintiffs and the Class are further entitled to recover
25 their attorneys’ fees and costs pursuant to 15 U.S.C. § 1681n(a)(3).
26 //
27 //
28 //
PLAINTIFFS’ CLASS ACTION COMPLAINT
16
1 THIRD CAUSE OF ACTION
FOR VIOLATION OF THE INVESTIGATIVE CONSUMER REPORTING AGENCIES
2
ACT
3 (Violation of California Civil Code 1786, et seq.)
(On Behalf of Plaintiffs against all Defendants)
4
61. Plaintiffs re-allege and incorporate by reference the allegations contained in the
5
paragraphs above as if fully set forth herein.
6
62. At all relevant times, Plaintiffs were consumers as that term is defined in Civil
7
Code § 1786.2(b), and Defendants and Does 1 to 100 are defined as persons as that term is defined
8
in Civil Code § 1786.2(a) and procured or cause to be prepared an investigative consumer report as
9
that term is defined in Civil Code § 1786.2(c) on Plaintiffs for employment purposes under Civil
10
Code § 1786.12(d)(1) without meeting the following applicable conditions required by Civil
11
Code § 1786.16(a)(2).
12
63. Like the FCRA, the ICRAA also requires that an employer who undertakes an
13
adverse action against the employee based on items contained in the background check provide the
14
employee with a copy of the background check, along with a summary of rights under the ICRAA.
15
Cal. Civil Code §1786.40. The report and the summary of rights must be provided before any
16
adverse action can be undertaken.
17
64. Further, the ICRAA Cal. Civil Code § 1786.18(a)(7) provides that: “(a) Except as
18
authorized under subdivision (b), an investigative consumer reporting agency may not make or
19
furnish any investigative consumer report containing any of the following items of information: …
20
(7) Records of arrest, indictment, information, misdemeanor complaint, or conviction of a crime
21
that, from the date of disposition, release, or parole, antedate the report by more than seven years.
22
…”
23
65. As stated above, Defendants relied on convictions that were more than seven (7)
24
years old in their hiring decision. Defendants also did not provide Plaintiffs with copies of their
25
background report and a summary of their rights under the ICRAA prior to Defendants
26
undertaking an adverse action against them.
27
28
PLAINTIFFS’ CLASS ACTION COMPLAINT
17
1 66. Defendants were either grossly negligent in violating, or willfully violated, the
2 ICRAA by acting without a good faith, reasonable belief in the legality of their actions, and/or in
3 deliberate or reckless disregard of their legal obligations and the rights of Plaintiffs under the
4 statute.
5 67. Plaintiffs have been damaged by these violations and seek the following relief
6 pursuant to pursuant to Civil Code § 1786.50:
7 a. Any actual damages sustained by the consumer as a result of the failure or, ten
8 thousand dollars ($10,000), whichever sum is greater;
9 b. the costs of the action together with reasonable attorney’s fees as determined by the
10 court; and
11 c. In the case of a violation that was grossly negligent or willful, punitive damages.
12 FOURTH CAUSE OF ACTION
VIOLATIONS OF LABOR CODE SECTION 432.7
13 (On Behalf of Plaintiff Williams Against Defendant Select Source)
14
68. Plaintiff Williams re-alleges and incorporates by reference each and every
15
allegation set forth in the preceding paragraphs.
16
69. Labor Code Section 432.7 provides that:
17
432.7. (a) (1) An employer, whether a public agency or private individual
18 or corporation, shall not ask an applicant for employment to disclose,
through any written form or verbally, information concerning an arrest or
19 detention that did not result in conviction, or information concerning a
referral to, and participation in, any pretrial or posttrial diversion program,
20 or concerning a conviction that has been judicially dismissed or ordered
sealed pursuant to law, including, but not limited to, Sections 1203.4,
21
1203.4a, 1203.425, 1203.45, and 1210.1 of the Penal Code. An employer
22 also shall not seek from any source whatsoever, or utilize, as a factor in
determining any condition of employment including hiring, promotion,
23 termination, or any apprenticeship training program or any other training
program leading to employment, any record of arrest or detention that did
24 not result in conviction, or any record regarding a referral to, and
25 participation in, any pretrial or posttrial diversion program, or concerning
a conviction that has been judicially dismissed or ordered sealed pursuant
26 to law, including, but not limited to, Sections 1203.4, 1203.4a, 1203.425,
1203.45, and 1210.1 of the Penal Code. This section shall not prevent an
27 employer from asking an employee or applicant for employment about an
arrest for which the employee or applicant is out on bail or on their own
28 recognizance pending trial.
PLAINTIFFS’ CLASS ACTION COMPLAINT
18
1
70. Contrary to the Labor Code, however, Select Source proceeded to take an adverse
2
employment action against Plaintiff Williams based on a dismissed case. While Plaintiff Williams
3
tried to reach out t
Preview
1 POTTER HANDY LLP Mark D. Potter (SBN 166317) 2 mark@potterhandy.com James M. Treglio (SBN 228077) 3 jimt@potterhandy.com 4 100 Pine St., Ste 1250 San Francisco, CA 94111 5 (415) 534-1911 Fax: (888) 422-5191 6 Attorneys for Plaintiffs and the Putative Class 7 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA 8 FOR THE COUNTY OF LOS ANGELES 9 EUGENE HOWARD and ROBERT CASE NO: 10 WILLIAMS, individually and on behalf of all others similarly situated, CLASS ACTION COMPLAINT FOR: 11 Plaintiffs, (1) VIOLATIONS OF FAIR CREDIT 12 REPORTING ACT, 15 U.S.C. 13 v. §1681b(b)(2); (2) VIOLATIONS OF FAIR CREDIT 14 SELECT SOURCE INTERNATIONAL, REPORTING ACT, 15 U.S.C. §1681b(b)(3); 15 INC., a Minnesota corporation; STERLING (3) VIOLATIONS OF CALIFORNIA CHECK CORP., a Delaware corporation; and INVESTIGATIVE CONSUMER 16 DOES 1 to 100, inclusive REPORTING AGENCIES ACT, CAL. CIVIL CODE §1786, ET. SEQ.; AND 17 Defendants. (4) VIOLATIONS OF LABOR CODE SECTION 432.7 18 DEMAND FOR JURY TRIAL 19 20 Plaintiffs Eugene Howard and Robert Williams (“Plaintiffs”), on behalf of themselves, the 21 State of California, and all others similarly situated (hereinafter “Class Members”) complains and 22 alleges as follows: 23 OVERVIEW OF CLAIMS 24 1. Plaintiffs bring this action on behalf of themselves and all others similarly situated, 25 as a class action complaint against Defendants SELECT SOURCE INTERNATIONAL, INC. 26 (“Select Source” and/or “Defendant”), STERLING CHECK CORP. (“Sterling”), and DOES 1 to 27 100 (collectively “Defendants”) for requiring Plaintiffs and their fellow applicants to undergo 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 1 1 background checks in violation of the (1) Fair Credit Reporting Act (“FCRA”); (2) Investigative 2 Consumer Reporting Agencies Act (“ICRAA”); and (3) Labor Code Section 432.7, relying on a 3 conviction that is more than seven (7) years old in a hiring decision. As a result of the foregoing, 4 Defendants have violated California statutory laws as described below. 5 2. The “Class Period” is designated as the period from four years prior to the filing of 6 this Complaint trough the trial date. Defendants’ violations of the FCRA and ICRAA, as described 7 more fully below, have been ongoing throughout the Class Period. 8 VENUE 9 3. Venue is proper in this county under section 395.5 of the California Code of Civil 10 Procedure. Many, if not all, of the putative Class Members applied with, were employed by, 11 and/or performed work for Defendants in Los Angeles County during the Class Period. Many of 12 the acts alleged herein including Defendants’ background checks done in violation of the law 13 occurred in Los Angeles County. Venue is therefore proper in Los Angeles County. 14 JURISDICTION 15 4. Defendant SELECT SOURCE INTERNATIONAL, INC. is within the jurisdiction 16 of this Court. Defendants transact millions of dollars as provider of a full range of consulting, 17 implementation, and integration services that increase business productivity. Select Source offers a 18 wide range of customized staffing solutions for its customers. Thus, Defendants have obtained the 19 benefits of the laws of the State of California. 20 5. Defendant STERLING CHECK CORP. is within the jurisdiction of this Court. 21 Defendants transact millions of dollars as a background check company. Sterling offers a wide 22 range of customized background check solutions for its customers. Thus, Defendants have 23 obtained the benefits of the laws of the State of California. 24 THE PARTIES 25 A. The Plaintiffs 26 6. Plaintiff Howard is a California resident and in or about August 2022, he applied 27 for a job with Defendant. At all relevant times, Plaintiff was subjected to background checks that 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 2 1 violated the law. 2 7. Plaintiff Williams is a California resident and in or about June 2022, he applied for 3 a job with Defendant. At all relevant times, Plaintiff was subjected to background checks that 4 violated the law. 5 8. Plaintiffs are members of, and seek to represent the following class: “All natural 6 persons with an address in the United States and its Territories beginning two years prior to the 7 filing of this Complaint and continuing through the resolution of this action (1) who applied for 8 employment with Select Source, or its predecessor or merged entities, as hourly employees, (2) 9 who are or were required to undergo a background check with Sterling as part of their application 10 process during the Class Period, and were denied employment without being provided with a copy 11 of their consumer report and a summary of rights under the FCRA.” (“The Applicant Class” or the 12 “Class” or “Class Members). 13 B. The Defendants 14 9. Defendant Select Source International, Inc. is a Minnesota corporation 15 headquartered in Minnetonka, Minnesota. It is a provider of a full range of consulting, 16 implementation, and integration services that increase business productivity. Select Source offers a 17 wide range of customized staffing solutions for its customers. It collects information, compiles 18 consumer reports, and conducts background checks on applicants like Plaintiffs and the Class 19 Members. 20 10. Defendant Sterling Check Corp. is a Delaware corporation headquartered in New 21 York, New York. It offers a full range of background check services and solutions to its customers. 22 It collects information, compiles consumer reports, and conducts background checks on applicants 23 like Plaintiffs and the Class Members. 24 11. The true names and capacities, whether individual, corporate, associate, or 25 otherwise, of Defendants sued herein as DOES 1 to 50, inclusive, are currently unknown to 26 Plaintiffs, who therefore sue Defendants by such fictitious names under Code of Civil Procedure § 27 474. Plaintiffs are informed and believe, and based thereon allege, that each of the Defendants 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 3 1 designated herein as a DOE is legally responsible in some manner for the unlawful acts referred to 2 herein. Plaintiffs will seek leave of court to amend this Complaint to reflect the true names and 3 capacities of the Defendants designated hereinafter as DOES when such identities become known. 4 12. Plaintiffs are informed and believe, and based thereon allege, that each Defendant 5 acted in all respects pertinent to this action as the agent of the other Defendants, carried out a joint 6 scheme, business plan or policy in all respects pertinent hereto, and the acts of each Defendant are 7 legally attributable to the other Defendants. Furthermore, Defendants in all respects acted as the 8 employer and/or joint employer of Plaintiffs and the Class Members. 9 13. California courts have recognized that the definition of “employer” for purposes of 10 enforcement of the California Labor Code goes beyond the concept of traditional employment to 11 reach irregular working arrangements for the purpose of preventing evasion and subterfuge of 12 California’s labor laws. Martinez v. Combs (2010) 49 Cal. 4th 35, 65. As such, anyone who 13 directly or indirectly, or through an agent or any other person, engages, suffers, or permits any 14 person to work or exercises control over the wages, hours, or working conditions of any person, 15 may be liable for violations of the California Labor Code as to that person. Cal. Labor Code §§558 16 and 558.1. 17 14. California law also permits and recognizes the piercing of a corporate veil between 18 sister companies and under the single enterprise rule. Hasso v. Hapke (2014) 227 Cal. App. 4th 19 107, 155; Greenspan v. LADT, LLC (2010) 191 Cal. App. 4th 486, 512. The single enterprise rule 20 applies where “there are two or more personalities, there is but one enterprise; and that this 21 enterprise has been so handled that it should respond, as a whole, for the debts of certain 22 component elements of it.” Hasso 227 Cal. App. 4th at 155; Greenspan, 191 Cal. App. 4th at 512. 23 FACTUAL ALLEGATIONS 24 15. Plaintiffs and the Class are and were employed by and/or applicants of Select 25 Source International, Inc., a Minnesota corporation headquartered in Minnetonka, Minnesota. 26 Select Source is a provider of a full range of consulting, implementation, and integration services 27 that increase business productivity. It offers a wide range of customized staffing solutions for its 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 4 1 customers. 2 16. In or about August 2022, Plaintiff Howard was considered by Select Source for a 3 software engineer position. After providing Defendant with all the information it required for the 4 application, Plaintiff Howard was asked by Select Source to confirm if he had any felonies. Select 5 Source also informed Plaintiff Howard that it needed a waiver from him since Sterling, the 6 consumer reporting agency that Select Source hired, ran a 15-year background check, also known 7 as a consumer report, or an investigative consumer report, on Plaintiff Howard. 8 17. On or about September 27, 2022, Plaintiff Howard sent an email to Select Source 9 requesting for an update on his application. Select Source replied that while Plaintiff Howard was 10 shortlisted for the position, someone else was hired to fill in the job. Plaintiff Howard was also 11 advised by Select Source to make himself available in the job boards. 12 18. Aware that an illegal background check was conducted on him and hoping that the 13 same problem will not happen again in the future, Plaintiff Howard asked Select Source for a copy 14 of the consent form to conduct background checks used by Select Source. Select Source then 15 informed Plaintiff Howard that what it needed was a confirmation from Plaintiff Howard that he 16 does not have any felony or criminal records which would prevent Select Source from hiring him. 17 19. Realizing that Select Source probably considered Plaintiff Howard’s past criminal 18 conviction which was dismissed pursuant to Penal Code §1203.4, in its hiring decision, Plaintiff 19 Howard told Select Source that the confirmation it required from Plaintiff Howard would be 20 against the law. Select Source’s only reply to Plaintiff was that it would no longer proceed with his 21 application and/or employment. 22 20. With regard to Plaintiff Williams, he was offered an IT support technician position 23 by Select Source. Plaintiff Williams was given a start date, pay rate, and work schedule by Select 24 Source, contingent upon his successful passing of a drug test and criminal background check. 25 21. After a background check was conducted by Sterling on Plaintiff Williams with 26 purposeful misinformation attached to the background report, Select Source rescinded its job offer 27 to Plaintiff Williams. 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 5 1 22. In its background report on Plaintiff Williams, Sterling noted an arrest from 2019 2 that was dismissed but was maliciously classified by Sterling as a conviction that resulted in a year 3 of incarceration, three years of supervised adult probation, and specific dollar amounts in court 4 fines and restitution, which misinformation ultimately caused Select Source to take back its earlier 5 offer of employment to Plaintiff Williams. 6 23. The Superior Court case number relied upon by Sterling in its background report on 7 Plaintiff Williams clearly show a dismissal and makes absolutely no mention of a conviction, jail 8 time, probation, restitutions, and/or court fines. These were all factors Sterling created and 9 interjected into Plaintiff Williams’ background report, which cost Plaintiff Williams his job offer. 10 24. Defendants never asked Plaintiffs to sign any authorization to run a background 11 check. Defendants never provided Plaintiffs with copies of their background checks and/or 12 consumer reports. Rather than provide Plaintiffs with an opportunity to respond to items contained 13 within the consumer reports, Defendants immediately chose not to proceed with Plaintiffs’ 14 applications and/or employments. Plaintiffs were not provided with a copy of their consumer 15 reports, or a summary of rights under the Fair Credit Reporting Act (“FCRA”). 16 25. Labor Code section 432.7 specifies that an employer may not gather information, or 17 utilize information collected from any source regarding any conviction dismissed pursuant to Penal 18 Code section 1203.4. Specifically, section (a)(1) of the statute states: 19 An employer, whether a public agency or private individual or corporation, shall not ask an applicant for employment to disclose, through any written form or verbally, 20 information concerning an arrest or detention that did not result in conviction, or information concerning a referral to, and participation in, any pretrial or posttrial 21 diversion program, or concerning a conviction that has been judicially dismissed or 22 ordered sealed pursuant to law, including, but not limited to, Sections 1203.4, 1203.4a, 1203.425, 1203.45, and 1210.1 of the Penal Code. An employer also shall not seek 23 from any source whatsoever, or utilize, as a factor in determining any condition of employment including hiring, promotion, termination, or any apprenticeship training 24 program or any other training program leading to employment, any record of arrest or 25 detention that did not result in conviction, or any record regarding a referral to, and participation in, any pretrial or posttrial diversion program, or concerning a conviction 26 that has been judicially dismissed or ordered sealed pursuant to law, including, but not limited to, Sections 1203.4, 1203.4a, 1203.425, 1203.45, and 1210.1 of the Penal Code. 27 This section shall not prevent an employer from asking an employee or applicant for employment about an arrest for which the employee or applicant is out on bail or on 28 their own recognizance pending trial. PLAINTIFFS’ CLASS ACTION COMPLAINT 6 1 26. By relying on information regarding a conviction which had been dismissed with 2 regard to Plaintiff Williams, Defendant Select Source violated Labor Code §432.7. Further, 3 Defendant Sterling violated the ICRAA by reporting convictions older than seven years, and which 4 had been dismissed. 5 27. The FCRA was enacted in 1970, became effective on April 25, 1971, and has been 6 in force since that date. The Fair and Accurate Credit Transactions Act amended the FCRA in 7 December 2003, and the Dodd-Frank Act amended the FCRA in July 2010. 8 28. All background checks are defined as consumer reports under the FCRA. 9 Specifically, the FCRA defines a consumer report as: 10 In general.—The term “consumer report” means any written, oral, or other 11 communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, 12 character, general reputation, personal characteristics, or mode of living 13 which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility 14 for— (A) credit or insurance to be used primarily for personal, family, or 15 household purposes; (B)employment purposes; or 16 (C) any other purpose authorized under section 1681b of this title. 17 15 U.S.C. 1681a(d)(1). 18 29. As stated above, Plaintiffs were subjected by Defendants to a background check in 19 relation to Defendants’ offer of employment. However, Defendants violated the FCRA by not 20 providing Plaintiffs with the disclosures to perform consumer reports. Defendants also failed to 21 provide Plaintiffs with adequate time to review the background check for accuracy. 22 30. The Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681b(b)(2) provides: 23 (b)Conditions for furnishing and using consumer reports for employment purposes 24 (2)Disclosure to consumer (A)In general 25 Except as provided in subparagraph (B), a person may not procure a consumer report, 26 or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless— 27 (i)a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists 28 solely of the disclosure, that a consumer report may be obtained for employment PLAINTIFFS’ CLASS ACTION COMPLAINT 7 1 purposes; and (ii)the consumer has authorized in writing (which authorization may be made on the 2 document referred to in clause (i)) the procurement of the report by that person. 3 31. Indeed, Courts have held that providing FCRA disclosure forms as part of 4 employment applications violates the FCRA. E.E.O.C. v. Video Only, Inc., 2008 WL 2433841 at 5 *11 (D. Or. June 11, 2008) (granting summary judgment against the defendant employer who 6 made a disclosure as a part of the job application, which is not a document consisting solely of the 7 disclosure); Rubio-Delgado v. Aerotek, Inc., 2015 WL 3623627, at *1 (N.D. Cal. June 10, 2015) 8 (“Employers also violate the FCRA if they provide the required disclosure in a document that does 9 not consist solely of the disclosure, such as when the disclosure is integrated as part of a job 10 application.”). 11 32. Indeed, the inclusion of any extraneous information, including information related 12 to the disclosure, violates the FCRA. In Syed v. M-I, LLC, 853 F.3d 492 (9th Cir. 2017), the 9th 13 Circuit held that the employer violated this provision when it included a liability waiver in the 14 disclosure. See Moody v. Ascenda USA, 2016 WL 4702681 (S.D. Fla. July 1, 2016) (holding that 15 inclusion of a waiver in an authorization and disclosure form violates 15 U.S.C. 15 U.S.C. § 16 1681b(b)(2)(A)) (“the Court will align itself with the district courts that have held that inclusion of 17 a waiver within the disclosure document is sufficient to state a violation of § 1681b(b)(2)(A)(i).”); 18 See Milbourne v. JRK Residential Am., LLC, 92 F. Supp. 3d 425, 433 (E.D. Va. 2015) (holding 19 that the inclusion of a waiver within a document containing the disclosure would violate 15 U.S.C. 20 §1681b(b)(2)(A)) (“[A]lthough the policy goal of the FCRA may have been to secure clear 21 disclosures to consumers, it does so in part by including language that requires the disclosure to be 22 in its own separate document.”); Reardon v. Closetmaid Corp., 2013 WL 6231606 at *10-11 23 (W.D. Pa. Dec. 2, 2013) (holding that a disclosure with a liability waiver was contrary to the 24 statute). 25 33. If the mere inclusion of the authorization and disclosure forms as part of 26 employment applications and the inclusion of any extraneous information therein constitute 27 violations of the FCRA, then all the more that Defendants’ acts of running a background check on 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 8 1 Plaintiffs that go farther back than seven (7) years and without giving them any opportunity to 2 review the consumer report for accuracy violate the FCRA. 3 34. The FCRA limits the use of the report to make adverse actions against the 4 employee, stating that an employer cannot take adverse action against the employee unless the 5 employer does the following: 6 in using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending 7 to take such adverse action shall provide to the consumer to whom the report relates— 8 (i) a copy of the report; and 9 (ii) a description in writing of the rights of the consumer under this subchapter, as prescribed by the Bureau under section 1681g(c)(3)(1) of 10 this title. 11 15 U.S.C. §1681b(b)(3)(A)(i) and (ii). 12 35. Prior to its decision to terminate and rescind Plaintiffs’ applications and/or 13 employments, Defendants did not provide Plaintiffs or the Applicant Class with a copy of their 14 consumer reports, and did not provide them with a summary of their rights under the FCRA. 15 36. In addition to the FCRA, the ICRAA, Cal. Civil Code §1786, et. seq., provides 16 protections to employees who undergo a background check (called an investigative consumer 17 report by the statute), for employment purposes. Like the FCRA, the ICRAA requires that an 18 employer who undertakes an adverse action against the employee based on items contained in the 19 background check provide the employee with a copy of the background check, along with a 20 summary of rights under the ICRAA. Cal. Civil Code §1786.40. The report and the summary of 21 rights must be provided before any adverse action can be undertaken. 22 37. Further, the ICRAA Cal. Civil Code § 1786.18(a)(7) provides that: “(a) Except as 23 authorized under subdivision (b), an investigative consumer reporting agency may not make or 24 furnish any investigative consumer report containing any of the following items of information: … 25 (7) Records of arrest, indictment, information, misdemeanor complaint, or conviction of a crime 26 that, from the date of disposition, release, or parole, antedate the report by more than seven years. 27 …” 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 9 1 38. As stated above, Defendants relied on convictions that were more than seven (7) 2 years old in their hiring decision. Defendants also did not provide Plaintiffs with copies of their 3 background report and a summary of their rights under the ICRAA prior to Defendants 4 undertaking an adverse action against them. Nor did Defendants provide Plaintiffs with the 5 consumer reporting agencies’ proper phone number and address, or inform them of the office 6 hours upon which they could inspect the investigative consumer report at their offices. Thus, 7 Defendants violated the ICRAA. 8 39. At all relevant times, Defendants were aware and have knowledge of the 9 requirements of the FCRA and the ICRAA. 10 40. Indeed, even if Defendants were not initially aware of the requirements of the FCRA 11 and ICRAA, Defendants, in obtaining consumer reports, investigative consumer reports, and 12 consumer credit reports on Plaintiffs and the Class Members, utilized consumer reporting agencies 13 which are prohibited from providing such reports to Defendants without first obtaining a 14 certification that Defendants would comply with the FCRA and ICRAA. 15 U.S.C. §1681b(b)(2); 15 Civil Code §1786.12(e). 16 41. As such, Plaintiffs and the Class Members were unlawfully required to undergo 17 investigative consumer reports as a consequence of their employment, in direct violation of Civil 18 Code §1786.16, and 15 U.S.C. §1681b(b)(2) and (3). 19 CLASS ACTION ALLEGATIONS 20 42. Plaintiffs bring this action, on behalf of themselves and all others similarly situated, 21 as a class action pursuant to Code of Civil Procedure § 382. 22 43. Plaintiffs are members of, and seek to represent the following class: “All natural 23 persons with an address in the United States and its Territories beginning two years prior to the 24 filing of this Complaint and continuing through the resolution of this action (1) who applied for 25 employment with Select Source, or its predecessor or merged entities, as hourly employees, (2) 26 who are or were required to undergo a background check with Sterling as part of their application 27 process during the Class Period, and were denied employment without being provided with a copy 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 10 1 of their consumer report and a summary of rights under the FCRA.” 2 44. This action has been brought and may properly be maintained as a class action 3 under Code of Civil Procedure § 382 because there is a well-defined community of interest in the 4 litigation, the proposed class is easily ascertainable, and Plaintiffs are proper representatives of the 5 Class: 6 a. Numerosity: The potential members of the Class as defined are so 7 numerous that joinder of all the members of the Class is impracticable. While the precise number 8 of Class Members has not been determined at this time, Plaintiffs are informed and believe that 9 Defendants have, on average, during the Class Period employed over 200 Class Members. The 10 Class Members are dispersed throughout the United States. Joinder of all members of the 11 proposed classes is therefore not practicable. 12 b. Commonality: There are questions of law and fact common to Plaintiffs and 13 the Class that predominate over any questions affecting only individual members of the Class. 14 These common questions of law and fact include, without limitation: 15 i. Whether Defendants required Plaintiffs and the Applicant Class Members to 16 undergo consumer reports as defined by the FCRA; 17 ii. Whether Defendants rescinded the application and/or employment of 18 Plaintiffs and the Applicant Class Members based on items contained within those consumer 19 reports; 20 iii. Whether Defendants provided Plaintiffs and members of the Applicant 21 Class with notifications that contained the consumer reports they relied upon in making adverse 22 employment decisions, such as rescission of an application and/or employment offer, as required 23 by 15. U.S.C. 1681b(b)(3); 24 iv. Whether Defendants provided Plaintiffs and members of the Applicant 25 Class with notifications of adverse employment action prior to making the adverse employment 26 action that contained the summary of rights under the FCRA as required by 15 U.S.C. 1681b(b)(3); 27 v. Whether Defendants obtained, and relied upon, information of convictions 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 11 1 that were more than seven years old; 2 vi. Whether Defendants received or relied upon information concerning 3 convictions that were more than seven years old in making hiring decisions with regard to 4 Plaintiffs and the Class; 5 vii. The proper formula(s) for calculating damages, interest, and restitution 6 owed to Plaintiffs and the Class Members; 7 viii. The nature and extent of class-wide damages. 8 c. Typicality: Plaintiffs’ claims are typical of the claims of the Class. Both 9 Plaintiffs and Class Members sustained injuries and damages, and were deprived of property 10 rightly belonging to them, arising out of and caused by Defendants’ common course of conduct in 11 violation of law as alleged herein, in similar ways and for the same types of unlawful background 12 checks. 13 d. Adequacy of Representation: Plaintiffs are members of the Class and will 14 fairly and adequately represent and protect the interests of the Class and Class Members. 15 Plaintiffs’ interests do not conflict with those of Class and Class Members. Counsels who 16 represent Plaintiffs are competent and experienced in litigating large wage and hour class actions, 17 and other employment class actions, and will devote sufficient time and resources to the case and 18 otherwise adequately represent the Class and Class Members. 19 e. Superiority of Class Action: A class action is superior to other available 20 means for the fair and efficient adjudication of this controversy. Individual joinder of all Class 21 Members is not practicable, and questions of law and fact common to the Class predominate over 22 any questions affecting only individual members of the Class. Each Class Member has been 23 damaged or may be damaged in the future by reason of Defendants’ unlawful policies and/or 24 practices. Certification of this case as a class action will allow those similarly situated persons to 25 litigate their claims in the manner that is most efficient and economical for the parties and the 26 judicial system. Certifying this case as a class action is superior because it allows for efficient and 27 full disgorgement of the ill-gotten gains Defendants have enjoyed by maintaining its unlawful 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 12 1 background check policies and will thereby effectuate California’s strong public policy of 2 protecting employees. If this action is not certified as a Class Action, it will be impossible as a 3 practical matter, for many or most Class Members to bring individual actions to recover damages 4 for the unlawful background checks conducted by Defendants, due to the relatively small amounts 5 of such individual recoveries relative to the costs and burdens of litigation. 6 FIRST CAUSE OF ACTION FOR VIOLATION OF THE FEDERAL CREDIT REPORTING ACT 7 (Violation of 15 U.S.C. §§ 1681b(b)(2) 8 (On Behalf of Plaintiffs and the Applicant Class against Defendant Select Source) 9 45. Plaintiffs allege and incorporate by this reference the allegations in all preceding 10 paragraphs. 11 46. Defendant Select Source can be defined as a “person” under 15 U.S.C § 1681a(b) of 12 the FCRA. It obtained and used consumer reports of its employees and job applicants for 13 employment purposes. Plaintiffs and the Class “consumers” as defined by 15 U.S.C § 1681a(c) 14 because they are individuals. At all relevant times, Plaintiffs and the Class Members applied for 15 employment with Defendants. 16 47. As stated above, Plaintiffs were subjected by Select Source to a background check 17 in relation to their offer of employment. However, Select Source violated the FCRA by not 18 providing Plaintiffs with the disclosures to perform consumer reports. Select Source also failed to 19 provide Plaintiffs with adequate time to review the background check for accuracy. 20 48. The Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681b(b)(2) provides: 21 (b)Conditions for furnishing and using consumer reports for employment purposes 22 (2)Disclosure to consumer (A)In general 23 Except as provided in subparagraph (B), a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to 24 any consumer, unless— (i)a clear and conspicuous disclosure has been made in writing to the consumer at any 25 time before the report is procured or caused to be procured, in a document that consists 26 solely of the disclosure, that a consumer report may be obtained for employment purposes; and 27 (ii)the consumer has authorized in writing (which authorization may be made on the document referred to in clause (i)) the procurement of the report by that person. 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 13 1 49. Indeed, Courts have held that providing FCRA disclosure forms as part of 2 employment applications violates the FCRA. E.E.O.C. v. Video Only, Inc., 2008 WL 2433841 at 3 *11 (D. Or. June 11, 2008) (granting summary judgment against the defendant employer who 4 made a disclosure as a part of the job application, which is not a document consisting solely of the 5 disclosure); Rubio-Delgado v. Aerotek, Inc., 2015 WL 3623627, at *1 (N.D. Cal. June 10, 2015) 6 (“Employers also violate the FCRA if they provide the required disclosure in a document that does 7 not consist solely of the disclosure, such as when the disclosure is integrated as part of a job 8 application.”). 9 50. Indeed, the inclusion of any extraneous information, including information related 10 to the disclosure, violates the FCRA. In Syed v. M-I, LLC, 853 F.3d 492 (9th Cir. 2017), the 9th 11 Circuit held that the employer violated this provision when it included a liability waiver in the 12 disclosure. See Moody v. Ascenda USA, 2016 WL 4702681 (S.D. Fla. July 1, 2016) (holding that 13 inclusion of a waiver in an authorization and disclosure form violates 15 U.S.C. 15 U.S.C. § 14 1681b(b)(2)(A)) (“the Court will align itself with the district courts that have held that inclusion of 15 a waiver within the disclosure document is sufficient to state a violation of § 1681b(b)(2)(A)(i).”); 16 See Milbourne v. JRK Residential Am., LLC, 92 F. Supp. 3d 425, 433 (E.D. Va. 2015) (holding 17 that the inclusion of a waiver within a document containing the disclosure would violate 15 U.S.C. 18 §1681b(b)(2)(A)) (“[A]lthough the policy goal of the FCRA may have been to secure clear 19 disclosures to consumers, it does so in part by including language that requires the disclosure to be 20 in its own separate document.”); Reardon v. Closetmaid Corp., 2013 WL 6231606 at *10-11 21 (W.D. Pa. Dec. 2, 2013) (holding that a disclosure with a liability waiver was contrary to the 22 statute). 23 51. If the mere inclusion of the authorization and disclosure forms as part of 24 employment applications and the inclusion of any extraneous information therein constitute 25 violations of the FCRA, then all the more that Select Source’s acts of running a background check 26 on Plaintiffs that go farther back than seven (7) years and without giving them any opportunity to 27 review the consumer report for accuracy violate the FCRA. 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 14 1 52. As a result of such conduct, Plaintiffs and the Applicant Class are entitled to 2 statutory damages of not less than $100 and not more than $1,000 for each and every one of these 3 violations pursuant to 15 U.S.C. §1681n(a)(1)(A). 4 53. As a result of such conduct, Plaintiffs and the Applicant Class are further entitled 5 to recover their attorneys’ fees and costs pursuant to 15 U.S.C. § 1681n(a)(3). 6 SECOND CAUSE OF ACTION FOR VIOLATION OF THE FEDERAL CREDIT REPORTING ACT 7 (Violation of 15 U.S.C. §§ 1681b(b)(3) 8 (On Behalf of Plaintiffs and the Applicant Class against Defendant Select Source) 9 54. Plaintiffs allege and incorporate by this reference the allegations in all preceding 10 paragraphs. 11 55. Defendant Select Source can be defined as a “person” under 15 U.S.C § 1681a(b) of 12 the FCRA. It obtained and used consumer reports of its employees and job applicants for 13 employment purposes. Plaintiffs and the Class are “consumers” as defined by 15 U.S.C § 1681a(c) 14 because they are individuals. At all relevant times, Plaintiffs and the Class Members applied for 15 employment with Select Source. 16 56. The FCRA limits the use of the report to make adverse actions against the 17 employee, stating that an employer cannot take adverse action against the employee unless the 18 employer does the following: 19 in using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending 20 to take such adverse action shall provide to the consumer to whom the 21 report relates— (i) a copy of the report; and 22 (ii) a description in writing of the rights of the consumer under this subchapter, as prescribed by the Bureau under section 1681g(c)(3)(1) of 23 this title. 24 15 U.S.C. §1681b(b)(3)(A)(i) and (ii). 25 57. The FCRA also provides that: 26 (B)Application by mail, telephone, computer, or other similar means 27 (i)If a consumer described in subparagraph (C) applies for employment by mail, telephone, computer, or other similar means, and if a person who has 28 procured a consumer report on the consumer for employment purposes takes PLAINTIFFS’ CLASS ACTION COMPLAINT 15 1 adverse action on the employment application based in whole or in part on the report, then the person must provide to the consumer to whom the report 2 relates, in lieu of the notices required under subparagraph (A) of this section and under section 1681m(a) of this title, within 3 business days of taking such 3 action, an oral, written or electronic notification— 4 (I)that adverse action has been taken based in whole or in part on a consumer report received from a consumer reporting agency; 5 (II)of the name, address and telephone number of the consumer reporting agency that furnished the consumer report (including a toll-free telephone 6 number established by the agency if the agency compiles and maintains files on consumers on a nationwide basis); 7 (III)that the consumer reporting agency did not make the decision to take 8 the adverse action and is unable to provide to the consumer the specific reasons why the adverse action was taken; and 9 (IV)that the consumer may, upon providing proper identification, request a free copy of a report and may dispute with the consumer reporting agency 10 the accuracy or completeness of any information in a report. 11 (ii)If, under clause (B)(i)(IV), the consumer requests a copy of a consumer report from the person who procured the report, then, within 3 business days 12 of receiving the consumer’s request, together with proper identification, the person must send or provide to the consumer a copy of a report and a copy of 13 the consumer’s rights as prescribed by the Bureau under section 1681g(c)(3) 1 of this title. 14 15 15 U.S.C. §1681b(b)(3)(B)(i) and (ii). 16 58. Prior to its decision to terminate and rescind Plaintiffs’ and the Applicant Class 17 Member’s application and/or employment, Select Source did not provide Plaintiffs or the 18 Applicant Class Members with copies of their consumer reports, and did not provide them with a 19 summary of their rights under the FCRA. Select Source did not provide Plaintiffs and the 20 Applicant Class with the notifications and reports required under the FCRA. 21 59. As a result of such conduct, Plaintiffs and the Applicant Class are entitled to 22 statutory damages of not less than $100 and not more than $1,000 for each and every one of these 23 violations pursuant to 15 U.S.C. §1681n(a)(1)(A). 24 60. As a result of such conduct, Plaintiffs and the Class are further entitled to recover 25 their attorneys’ fees and costs pursuant to 15 U.S.C. § 1681n(a)(3). 26 // 27 // 28 // PLAINTIFFS’ CLASS ACTION COMPLAINT 16 1 THIRD CAUSE OF ACTION FOR VIOLATION OF THE INVESTIGATIVE CONSUMER REPORTING AGENCIES 2 ACT 3 (Violation of California Civil Code 1786, et seq.) (On Behalf of Plaintiffs against all Defendants) 4 61. Plaintiffs re-allege and incorporate by reference the allegations contained in the 5 paragraphs above as if fully set forth herein. 6 62. At all relevant times, Plaintiffs were consumers as that term is defined in Civil 7 Code § 1786.2(b), and Defendants and Does 1 to 100 are defined as persons as that term is defined 8 in Civil Code § 1786.2(a) and procured or cause to be prepared an investigative consumer report as 9 that term is defined in Civil Code § 1786.2(c) on Plaintiffs for employment purposes under Civil 10 Code § 1786.12(d)(1) without meeting the following applicable conditions required by Civil 11 Code § 1786.16(a)(2). 12 63. Like the FCRA, the ICRAA also requires that an employer who undertakes an 13 adverse action against the employee based on items contained in the background check provide the 14 employee with a copy of the background check, along with a summary of rights under the ICRAA. 15 Cal. Civil Code §1786.40. The report and the summary of rights must be provided before any 16 adverse action can be undertaken. 17 64. Further, the ICRAA Cal. Civil Code § 1786.18(a)(7) provides that: “(a) Except as 18 authorized under subdivision (b), an investigative consumer reporting agency may not make or 19 furnish any investigative consumer report containing any of the following items of information: … 20 (7) Records of arrest, indictment, information, misdemeanor complaint, or conviction of a crime 21 that, from the date of disposition, release, or parole, antedate the report by more than seven years. 22 …” 23 65. As stated above, Defendants relied on convictions that were more than seven (7) 24 years old in their hiring decision. Defendants also did not provide Plaintiffs with copies of their 25 background report and a summary of their rights under the ICRAA prior to Defendants 26 undertaking an adverse action against them. 27 28 PLAINTIFFS’ CLASS ACTION COMPLAINT 17 1 66. Defendants were either grossly negligent in violating, or willfully violated, the 2 ICRAA by acting without a good faith, reasonable belief in the legality of their actions, and/or in 3 deliberate or reckless disregard of their legal obligations and the rights of Plaintiffs under the 4 statute. 5 67. Plaintiffs have been damaged by these violations and seek the following relief 6 pursuant to pursuant to Civil Code § 1786.50: 7 a. Any actual damages sustained by the consumer as a result of the failure or, ten 8 thousand dollars ($10,000), whichever sum is greater; 9 b. the costs of the action together with reasonable attorney’s fees as determined by the 10 court; and 11 c. In the case of a violation that was grossly negligent or willful, punitive damages. 12 FOURTH CAUSE OF ACTION VIOLATIONS OF LABOR CODE SECTION 432.7 13 (On Behalf of Plaintiff Williams Against Defendant Select Source) 14 68. Plaintiff Williams re-alleges and incorporates by reference each and every 15 allegation set forth in the preceding paragraphs. 16 69. Labor Code Section 432.7 provides that: 17 432.7. (a) (1) An employer, whether a public agency or private individual 18 or corporation, shall not ask an applicant for employment to disclose, through any written form or verbally, information concerning an arrest or 19 detention that did not result in conviction, or information concerning a referral to, and participation in, any pretrial or posttrial diversion program, 20 or concerning a conviction that has been judicially dismissed or ordered sealed pursuant to law, including, but not limited to, Sections 1203.4, 21 1203.4a, 1203.425, 1203.45, and 1210.1 of the Penal Code. An employer 22 also shall not seek from any source whatsoever, or utilize, as a factor in determining any condition of employment including hiring, promotion, 23 termination, or any apprenticeship training program or any other training program leading to employment, any record of arrest or detention that did 24 not result in conviction, or any record regarding a referral to, and 25 participation in, any pretrial or posttrial diversion program, or concerning a conviction that has been judicially dismissed or ordered sealed pursuant 26 to law, including, but not limited to, Sections 1203.4, 1203.4a, 1203.425, 1203.45, and 1210.1 of the Penal Code. This section shall not prevent an 27 employer from asking an employee or applicant for employment about an arrest for which the employee or applicant is out on bail or on their own 28 recognizance pending trial. PLAINTIFFS’ CLASS ACTION COMPLAINT 18 1 70. Contrary to the Labor Code, however, Select Source proceeded to take an adverse 2 employment action against Plaintiff Williams based on a dismissed case. While Plaintiff Williams 3 tried to reach out t