Retailers are using a database to track alleged employee theft which might include coerced confessions.
Retailers across the country have helped amass vast databases of workers accused of stealing and are using that information to keep employees from working again in the industry.
It is believed that the database contains records from more than 75,000 business locations across the United States. Participating employers may include companies such as Rite Aid, CVS, Target, Home Depot, Jo-Ann Stores, and Marshalls.
The repositories of information, like First Advantage Corporation’s Esteem database, often contain scant details about suspected thefts and routinely do not involve criminal charges. Still, the information can be enough to scuttle a job candidate’s chances.
Some of the employees, who submit written statements after being questioned by store security officers, have no idea that they admitted committing a theft or that the information will remain in databases, according to interviews with consumer lawyers, regulators and employees.
Retailers “don’t want to take a chance on hiring somebody that they might have a problem with,” said Richard Mellor, the federation’s vice president for loss prevention.
The databases, which are legal, are facing scrutiny from labor lawyers and federal regulators, who worry they are so sweeping that innocent employees can be harmed. The lawyers say workers are often coerced into confessing, sometimes when they have done nothing wrong, without understanding that they will be branded as thieves.
The Federal Trade Commission has fielded complaints about the databases and is examining whether they comply with the Fair Credit Reporting Act, a federal law aimed at curbing inaccurate consumer information and giving consumers more control, said Anthony Rodriguez, a staff lawyer at the agency.
Screening for suspected episodes of shoplifting is one part of a background check, as companies scour for evidence of criminal convictions or sex-offender registration. Almost all retailers perform background checks, according to a 2011 survey from the federation. But some background-check companies are wary of the theft admissions, which retailers submit to the databases.
“That is not a product that we sell, because I think it’s a product fraught with risk and inefficiency,” said William Greenblatt, the chief executive of the background-check company Sterling Infosystems.
Federal authorities have zeroed in on background-check data. Last summer, the F.T.C. settled charges with HireRight, which provides a retail-theft database along with other types of screenings. Among the accusations, the agency said that some records were inaccurate and that the firm made it too difficult for consumers to dispute claims.
LexisNexis agreed to pay $13.5 million to settle a class-action suit on behalf of 31,000 people that accused the firm of violating consumer protection laws by selling background checks to debt collectors. The company did not admit wrongdoing.
As the economic recovery limps forward, consumer lawyers say, the consequences of the retail theft databases’ can be particularly devastating. With so many job applicants, employers have little incentive to hire someone with a tarnished background.
Since the recession, lawsuits have proliferated against the companies that operate retail theft databases, like LexisNexis, which owned Esteem until this year, HireRight and GIS, according to a review of court records. In the last year, the nature of the lawsuits has changed, too, as lawyers try to build class-action cases. HireRight did not return calls for comment, and the other firms declined to comment. http://www.nytimes.com/2013/04/03/business/retailers-use-databases-to-track-worker-thefts.html?hp&_r=2&
Credit Scars: A Dispatch Investigation:
http://www.dispatch.com/content/topic/special-reports/2012/credit-scores.html
Class action against LexisNexis survives:
http://www.courthousenews.com/2012/03/29/45172.htm
Keesha Goode and Victoria Goodman vs. LexisNexis:http://www.courthousenews.com/2012/03/29/esteem.pdf