Ryals et al. v. HireRight Solutions, Inc. — $28.375 million paid by HireRight

Oct 17

After years of litigation and mediation, the court approved a class action settlement in December 2011.
Key details include:

Total Settlement Amount: $28.375 million paid by HireRight.
Class Members: Over 665,000 people whose background reports were affected between October 2004 and October 2010.
Compensation:
- Between $15 and $82.50 per person for various §1681k subclasses.
- Around $200 per person for those who filed disputes (§1681i class).
- Up to $20,000 for claimants who could prove actual damages from HireRight’s.
Attorneys’ Fees: The court awarded $5.96 million in legal fees and expenses to class.
Individual Incentive Awards: Each named plaintiff received $10,000 for representing the class.

The case was then dismissed with prejudice, meaning it could not be refiled.

This case became one of the largest HireRight dispute settlements ever resolved under the Fair Credit Reporting Act. It proved that HireRight failed to notify consumers and accurately report background check information, causing widespread harm to job seekers nationwide.

The outcome showed that individuals affected by a HireRight failed background check had the right to sue HireRight and seek compensation for FCRA violations that impacted their employment opportunities.

The lawsuit emphasized that:

Background check companies must notify consumers when public record data might be used against them.
Consumers have the right to dispute and correct false or outdated information.
Companies that ignore these rights can face class-wide liability and major damages.

CLASS ACTION COMPLAINT

(For Violations of the Fair Credit Reporting Act, 15 U.S.C. §1681, et seq.)

I. NATURE OF THE ACTION

This is a class action lawsuit brought under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §1681 et seq., to address systemic and willful violations committed by HireRight Solutions, Inc., formerly known as USIS Commercial Services, Inc. (“HireRight” or “Defendant”), in connection with the preparation and dissemination of employment background check reports.
Plaintiffs bring this action on behalf of themselves and all similarly situated consumers nationwide who were the subjects of background check reports issued by Defendant for employment purposes, and whose rights under §§1681k, 1681e(b), 1681g, and 1681i of the FCRA were violated.
Defendant’s business model depends on the mass production and sale of consumer reports containing criminal record and other public data to employers. In doing so, Defendant failed to provide the legally required notice to consumers when such information was reported, failed to ensure maximum possible accuracy of its reports, and ignored or inadequately investigated consumer disputes.
Defendant’s conduct deprived thousands of job applicants of their FCRA rights, leading to adverse employment decisions, reputational harm, and economic injury. The violations were systematic, reckless, and knowing, constituting willful noncompliance with federal law.

II. JURISDICTION AND VENUE

Jurisdiction is proper in this Court pursuant to 15 U.S.C. §1681p and 28 U.S.C. §1331, as this action arises under the Fair Credit Reporting Act, a federal statute.
Venue is proper in the Eastern District of Virginia, as Defendant transacts substantial business within this District, and many of the events giving rise to this complaint occurred here.

III. PARTIES

Plaintiff James Ryals, Jr. is a resident of the Commonwealth of Virginia and was the subject of a background report prepared by HireRight for employment purposes.
Plaintiff Bahir Smith is a resident of Pennsylvania and was similarly subjected to an employment background check prepared by Defendant that contained inaccurate or incomplete public record information.
Plaintiff O’Neal Henderson is a resident of Pennsylvania and brings this action both individually and as a representative of a class of consumers similarly affected by Defendant’s unlawful practices.
Defendant HireRight Solutions, Inc. is a Delaware corporation headquartered in Tulsa, Oklahoma. At all times relevant hereto, Defendant was engaged in the business of assembling, evaluating, and furnishing consumer reports for third parties, as defined by 15 U.S.C. §1681a(f).
HireRight qualifies as a Consumer Reporting Agency (“CRA”) within the meaning of §1681a(f) and is therefore subject to the provisions and duties imposed by the FCRA.

IV. FACTUAL ALLEGATIONS

A. Defendant’s Business Practices

HireRight compiles and sells consumer background reports that include criminal records, civil filings, employment verifications, and other public and private data.
Defendant provides these reports to employers across the United States, who rely on them in making hiring, retention, and promotion decisions.
In preparing such reports, Defendant routinely accesses public record databases, including criminal court records, but fails to notify consumers contemporaneously that adverse information has been reported to an employer — as explicitly required by §1681k(a)(1) of the FCRA.
Defendant also fails to maintain or follow reasonable procedures to ensure that the information it reports is “complete and up to date”, as required by §1681k(a)(2) and §1681e(b).
As a result, Defendant has routinely furnished inaccurate, incomplete, or outdated information to employers — including criminal records that do not belong to the consumer, records that have been expunged, or information that is otherwise obsolete.
Defendant’s violations have caused consumers to suffer job denials, delayed employment, embarrassment, and reputational injury.

B. Failure to Provide Required Notice under §1681k

The FCRA mandates that when a consumer reporting agency furnishes a report containing public record information that is likely to have an adverse effect on a consumer’s ability to obtain employment, the agency must either:
a. Notify the consumer contemporaneously that such information is being reported to the employer; or
b. Maintain strict procedures ensuring the information is complete and up to date.
Defendant has failed to provide such notices and has not maintained procedures that meet FCRA standards.
Plaintiffs and members of the putative class were never provided notice when Defendant sent their reports to prospective employers that contained negative or potentially adverse information.
Defendant’s failure to comply with §1681k(a) was willful, as it has been on notice of the requirement for years through prior litigation, consent decrees, and industry guidance.

C. Failure to Ensure Maximum Possible Accuracy under §1681e(b)

Defendant also failed to adopt reasonable procedures to assure the maximum possible accuracy of the information it reports.
Plaintiffs and numerous class members were the victims of mixed files, where records belonging to other individuals were merged into their background reports.
In other cases, HireRight included criminal charges that had been dismissed, sealed, or expunged, falsely implying that consumers had active convictions.
Employers, relying on these inaccurate reports, took adverse actions such as denying employment, rescinding offers, or terminating employment.
Defendant’s failures reflect a reckless disregard of consumers’ rights and a pattern of cost-saving at the expense of legal compliance.

D. Failure to Provide Consumer Disclosures under §1681g

The FCRA requires that, upon a consumer’s request, a reporting agency must provide a copy of the consumer’s complete file.
Defendant routinely failed to provide full and timely copies of consumer reports to individuals who requested them.
Many consumers who attempted to verify the accuracy of their reports were either ignored, sent incomplete information, or were delayed for unreasonable periods of time.
As a result, consumers were prevented from discovering or correcting inaccuracies before suffering employment consequences.

E. Failure to Investigate Disputes under §1681i

When a consumer disputes the accuracy or completeness of information in their file, the FCRA obligates the reporting agency to conduct a reasonable reinvestigation within 30 days.
Defendant failed to reinvestigate disputes adequately, often verifying incorrect information without obtaining supporting documentation from original data sources.
Defendant’s reinvestigation process was largely automated, lacking meaningful human review or evaluation.
Plaintiffs who filed disputes were met with generic responses or form letters, indicating that Defendant failed to meet its statutory duties.

V. CLASS ALLEGATIONS

Plaintiffs bring this action on behalf of themselves and all others similarly situated under Fed. R. Civ. P. 23(a) and 23(b)(3).
The proposed classes include:

§1681k Class: All persons for whom HireRight furnished a consumer report for employment purposes containing public record information likely to have an adverse effect, without providing notice to the consumer, within the applicable limitations period.
§1681e(b) Class: All persons for whom HireRight prepared an employment report containing inaccurate or incomplete information due to its failure to maintain reasonable accuracy procedures.
§1681i Class: All persons who submitted disputes to HireRight concerning inaccurate or incomplete information and for whom HireRight failed to conduct a lawful reinvestigation.
§1681g Class: All persons who requested a copy of their consumer file from HireRight and did not receive a complete or timely disclosure.

The class period is defined as beginning October 5, 2004, and continuing through October 15, 2010, or as otherwise determined by the Court.
The class members number in the hundreds of thousands, making joinder impracticable.
Common questions of law and fact predominate over individual issues, including:

Whether HireRight violated §§1681k, 1681e(b), 1681i, and 1681g;
Whether the violations were willful or negligent;
The proper measure of statutory and actual damages; and
The appropriate injunctive and declaratory relief.

Plaintiffs’ claims are typical of those of the class and arise from the same unlawful conduct.
Plaintiffs and their counsel will fairly and adequately represent the interests of the class.
A class action is the superior method for adjudicating this controversy, given the uniform nature of the violations and the impracticality of individual litigation.

VI. CLAIMS FOR RELIEF

COUNT I — Violation of 15 U.S.C. §1681k

(Failure to Provide Notice and Maintain Complete Public Record Information)

Plaintiffs re-allege and incorporate paragraphs 1 through 42.
Defendant violated §1681k(a) by furnishing consumer reports for employment purposes containing adverse public record information without providing contemporaneous notice to the consumer.
Defendant did not maintain strict procedures designed to ensure that the information was complete and up to date.
Defendant’s conduct was willful, entitling Plaintiffs and the class to statutory and punitive damages under §1681n, as well as attorney’s fees and costs.

COUNT II — Violation of 15 U.S.C. §1681e(b)

(Failure to Assure Maximum Possible Accuracy)

Plaintiffs re-allege and incorporate paragraphs 1 through 42.
Defendant failed to follow reasonable procedures to ensure the accuracy of its reports.
As a result, Plaintiffs’ reports contained inaccurate criminal records and other false data that caused employment loss and reputational harm.
Defendant’s conduct was willful, warranting statutory and punitive damages, or in the alternative, negligent, entitling Plaintiffs to actual damages under §1681o.

COUNT III — Violation of 15 U.S.C. §1681g

(Failure to Provide Full Consumer File Upon Request)

Defendant failed to provide complete disclosures to consumers requesting their files, depriving them of the ability to verify and dispute information as permitted by the FCRA.
Defendant’s refusal or delay to provide full reports constitutes willful or negligent noncompliance with §1681g.

COUNT IV — Violation of 15 U.S.C. §1681i

(Failure to Conduct Reasonable Reinvestigation of Disputed Information)

Defendant failed to reinvestigate disputed items within the time limits required by law and failed to delete or correct inaccurate data.
Plaintiffs and other consumers suffered economic loss, emotional distress, and reputational injury as a result.
Defendant’s actions were willful, reckless, and part of a broader pattern of disregard for statutory duties.

VII. PRAYER FOR RELIEF

WHEREFORE, Plaintiffs, individually and on behalf of the Class, respectfully request that the Court:

A. Certify this action as a class action pursuant to Fed. R. Civ. P. 23;
B. Appoint Plaintiffs as Class Representatives and their counsel as Class Counsel;
C. Declare that Defendant violated the Fair Credit Reporting Act, 15 U.S.C. §§1681e(b), 1681g, 1681i, and 1681k;
D. Award statutory damages of not less than $100 and not more than $1,000 per violation pursuant to §1681n(a)(1)(A);
E. Award punitive damages for willful violations under §1681n(a)(2);
F. Award actual damages for negligent violations under §1681o(a)(1);
G. Award reasonable attorney’s fees, costs, and expenses;
H. Order injunctive relief requiring Defendant to implement lawful compliance procedures; and
I. Grant such other relief as the Court deems just and proper.

JURY TRIAL DEMAND

Plaintiffs hereby demand a trial by jury on all issues so triable.

Respectfully submitted,

By Counsel:

Leonard A. Bennett
Matthew J. Erausquin
Consumer Litigation Associates, P.C.

James A. Francis
Erin A. Novak
Francis & Mailman, P.C.

Counsel for Plaintiffs and the Proposed Class

Disclaimer:
This complaint has been reformatted and rewritten for informational and illustrative purposes only. It is based on publicly available court filings from Ryals et al. v. HireRight Solutions, Inc., United States District Court for the Eastern District of Virginia.
The text has been adapted for clarity, consistency, and educational use while maintaining the legal structure and tone of an original federal class action pleading.

This version does not constitute a filed pleading or legal advice, nor does it create an attorney-client relationship.
Individuals seeking to pursue similar claims or file a complaint should consult with a licensed attorney for advice tailored to their specific situation.

Original complaint: gov.uscourts.vaed.246817.127.0.pdf

Daniel Cohen