New England Motor Freight agrees to $870,500 settlement over consumer reports

By Clarissa Hawes, Land Line staff writer | Wednesday, June 04, 2014

New Jersey-based New England Motor Freight has agreed to pay $870,500 to settle a class action lawsuit filed in June 2012. A driver had filed a complaint against the company, alleging NEMF failed to obtain proper authorization from him before ordering a consumer report.

The named plaintiff in the case, Leonard Smith, alleged in his complaint that he applied in person for a job at NEMF in October 2011. He claims that the company did not provide a disclosure notice notifying him that NEMF was going to obtain a consumer report for employment purposes.

After Smith contacted NEMF about the status of his job application, he was advised that his “employment was denied due to information contained in the consumer report,” according to court documents.

Smith alleged that the consumer report obtained from Sterling Infosystems Inc. contained “erroneous and grossly inaccurate public record data.”

He also claims that NEMF failed to provide him with a copy of his consumer report and a summary of his rights under the Fair Credit Reporting Act.

According to court documents, there are approximately 5,843 preliminary class members, of which 1,890 filled out their claim forms. NEMF procured their consumer report or relied on information in their report in connection with “the class members’ application for employment with NEMF.” As part of the settlement, they are to receive no more than $333 each.

The preliminary sub-class consists of 825 members, of which only 204 completed their claim forms. According to court documents, NEMF used the information procured in their consumer reports to deny employment “in part or in whole because of the report’s contents.” They are to receive no more than $800 each.

Smith, the named plaintiff in the case, will receive $5,000 as part of the settlement deal approved by New Jersey Federal Judge Mark Falk in late May.

NEMF is among a growing number of trucking companies who have been sued over their hiring practices.

In the past year, Swift Transportation has agreed to pay $4.4 million to settle a class action lawsuit after failing to properly disclose its hiring practices, including background checks. In April 2013, U.S. Xpress settled a class action lawsuit for $2.7 million over its background checks involving HireRight, which was also fined by the Federal Trade Commission for numerous violations under the FCRA.

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