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Healthcare Services and JD Palatine FCRA Outdated Adverse Info Class Action Lawsuit

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Employee Termination

This class action alleges violations of the Fair Credit Reporting Act (FCRA) by JD Palatine LLC and Healthcare Services Group, Inc. in connection with a consumer report. First, the complaint alleges, JD Palatine issued a report containing outdated adverse information. Second, it claims, Healthcare Services Group took adverse action without giving the subject sufficient and timely notification, a copy of the report, and a summary of rights under the FCRA, so that she was unable to correct the errors in the report.

The class includes all residents of the US who, from June 8, 2012 through the resolution of this case, were the subject of a consumer report prepared by JD Palatine which included any non-conviction criminal record dated more than seven years before that report.

The FCRA regulates the collection, maintenance, and disclosure of the content of consumer reports assembled by CRAs. This includes information obtained from public records. Among other things, the provisions of the act are designed to protect ordinary persons from the inclusion of false, misleading, or outdated information in credit reports.

JD Palatine is a consumer reporting agency (CRA) which maintains consumer files. Some of these files are believed to contain public record information about the alleged criminal history of individuals. When CRAs create reports, the FCRA generally requires them to omit adverse information, including records of arrest, which are dated more than seven years before the report. They may include this adverse information only for reports to be used in connection with the employment of individuals at a yearly salary of $75,000 or more. However, the complaint alleges that JD Palatine regularly reports outdated records of arrest without any knowledge of whether the individual being reported on meets the salary threshold. This practice, the complaint says, has serious effects, because by the time the individual finds out about the outdated adverse information, the prospective employer already has the information and has formed opinions about the individual.

Healthcare Services uses JD Palatine’s reports as background checks on job applicants. If a user like Healthcare Services intends to take negative action based “in whole or in part” on the information in such reports, the FCRA requires the user to first tell the person who was the subject of the report and to provide the person with a copy of the report and a summary of dispute rights under the FCRA. The user is to do this before taking negative action, the complaint says, in order to give the person a chance to dispute the accuracy, completeness, or relevance of the information with the CRA that produced the report before the job is lost.

In this case, plaintiff Machelle Bitton claims she lost her job as a cook with Healthcare Services because of a report from JD Palatine. The report included four charges from 2005, including a felony charge of forgery. However, the forgery charge was dismissed by the judge and none of the other three charges resulted in a conviction. According to Bitton, Healthcare Services then terminated her employment without taking the steps required of a user. 

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