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Database Calls Innocent Workers ‘Thieves,’|Retail Employees Say in Class Action

PHILADELPHIA (CN) - In a federal class action, low-wage retail workers claim LexisNexis Risk & Information Analytics Group sabotaged their careers by characterizing them as "thieves" in the national employment database Esteem.

The database "helps organizations identify applicants with history of theft or fraud," and some of the nation's largest retailers subscribe, including Rite Aid, CVS, Target and Home Depot, according to the complaint.

The class claims that LexisNexis has "a contractual quid pro quo" arrangement whereby in exchange for database access to vet job applicants, "Esteem subscribers are required to 'contribute' new records of theft incidents involving their own employees or customers."

Under Esteem's "Rules of Participation," terminations resulting from "a company loss not strictly related to theft or fraud ... should not get reported," the complaint states.

But the class claims: "Defendant has not adopted any Rule of Participation that further defines the kinds of incidents that should be reported, nor has defendant issued any guidance or directive to Esteem subscribers, or provided any training to subscribers, designed to ensure that terminations for non-fraudulent reasons or for violations of policies not strictly related to theft or fraud are kept out of the Esteem database."

Included in an Esteem entry is an image of a purported "signed admission statement" by the accused employee.

The problem, the plaintiffs say, is that LexisNexis doesn't "impose on members any rules, procedures or criteria regarding what constitutes an 'admission,' how admissions may be obtained, the form of admission statements, or what, if anything, employees signing an 'admission statement' must be informed of about Esteem or the purpose of the statement."

The class adds: "And, where the statement refers to circumstances that could be interpreted as something other than a theft, defendant does not require the contributing member to furnish any clarifying information and, instead, resolves all doubt in favor of the contributing member."

LexisNexis styles the supposed admission a "verified admission statement," but the company does not do its due diligence to investigate or verify it, the class claims.

Named plaintiff Keesha Goode says that after she lost her job as a cashier at a mall in October 2008, she applied for a position with Family Dollar Stores, an Esteem subscriber, in May 2009.

She received a "Pre-Adverse Action Notice" supposedly from Family Dollar Stores, claiming a background check had yielded information on her that could hurt her chance for the job, Goode claims.

Goode says she sent a letter to the defendant's predecessor, ChoicePoint WorkPlace Solutions, explaining that she "was accused of not reporting on a former employee who was stealing merchandise, but I did not steal anything myself." She also "expressly requested 'a copy of all information about me that [defendant] has regarding this report.'" (Brackets in complaint.)

Goode says she never got the job with Family Dollar Stores, and "still has not been provided a copy of the so-called 'admission statement' being maintained by defendant in its Esteem system," which she has a right to dispute.

"The failure of defendant to provide consumers with the actual 'admission statement' forming the basis of the Esteem theft reports is particularly egregious in that, by such failure, defendant is systematically undermining the possibility of meaningful consumer disputes by requiring consumers to dispute the accuracy of 'admission statements' it does not let consumer see," according to the complaint.

Plaintiff Victoria Goodman says that while working as a cashier and stocker for Dollar General, she was told she was the subject of a theft investigation, and was told to leave work and to not return until the investigation concluded.

As time passed with no word about the investigation, Goodman applied for unemployment compensation - an application that was unopposed by Dollar General, she says.

"Had she, in fact, been discharged for committing a theft ... Dollar General would not have been liable for her unemployment compensation," according to the complaint.

Goodman says she was approved for the benefits, and eventually went to work as a cashier for Rite Aid, but after more than 3 years at that job, she was fired after she applied for a promotion to supervisor.

"After she was fired, plaintiff received a computer-generated Pre-Adverse Action Notice" telling her that a consumer report received by Esteem subscriber Rite-Aid "may adversely affect your employment status with Rite Aid Corporation," Goodman says.

She says the Fair Credit Reporting Act requires that such notices be sent to people before adverse employment action is taken, not after, as occurred with both plaintiffs.

When an employer makes an inquiry in Esteem about a job applicant, the LexisNexis Risk & Information Analytics Group is prompted to verify whether the applicant exists in the database, and then "adjudicates" the inquiry, labeling the individual as a "non-competitive" applicant if a match is found, the plaintiffs say.

That adjudication is "a critical step in an employment decision," and therefore LexisNexis "is itself taking adverse actions with regards to employment applications before it mails out the required Pre-Adverse Action Notice," according to the complaint.

Goodman says she was eventually reinstated at Rite Aid, but that she faces "continuing impediments to future promotions or hiring in so far as she is being classified as a thief in a nationwide employment database."

The women demand statutory and punitive damages for the class, under the Fair Credit Reporting Act.

They are represented by Irv Ackelsberg with Langer Grogan & Diver in Philadelphia.

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