Pennsylvania Record

Saturday, December 7, 2019

Judge limits recovery in class action against Rite Aid to actual damages

By Nicholas Malfitano | Jun 4, 2015

U.s. district judge jan dubois1

PHILADELPHIA - A Philadelphia federal judge has dismissed a portion of a class action lawsuit filed against Rite Aid over its practice of conducting background screenings on new hires.

Judge Jan DuBois, of the U.S. District Court for the Eastern District of Pennsylvania, ruled on May 29 that the plaintiffs in the suit can only seek actual damages under the Fair Credit Reporting Act. She refused to dismiss the suit in its entirety, finding the plaintiffs' FCRA allegations are "plausible."

Kyra Moore initially filed suit against Rite Aid in March 2013 and followed that up with an amended complaint in August 2014, charging Rite Aid with “willful” violation of the FCRA through its use of LexisNexis Screening Solutions.

The class action litigation represents any prospective Rite Aid hires residing in the United States who were declared ineligible for hire within a prior two-year time frame of the suit’s initial filing, and to whom Rite Aid failed to provide a copy of their background report or a copy of the FCRA summary of rights at least five business days before such classification occurred.

Prior to any contact with Rite Aid, Moore worked for CVS from 2006 to 2010. Her employment there ended after an interview with a loss prevention officer regarding missing store stock, which CVS believed Moore had stolen. Moore was asked to sign a statement and then dismissed, according to her account.

In 2011, Moore applied for a store supervisor position at Rite Aid, which subjected her to a background screening by LexisNexis.

One component of the LexisNexis screening process was the “Esteem” or “Retail Theft” database, which searched for any record of a prospective employee’s involvement in retail theft when working for any other LexisNexis client companies.

A match in this database would immediately disqualify the affected person from employment at Rite Aid or any fellow LexisNexis client companies.

In such a situation, LexisNexis would send an initial notice letter to the disqualified candidate on Rite Aid stationery (which included their background report, though not the full report used to make the decision), plus a second “adverse action notice” informing them of their hiring ineligibility status within five business days.

Moore claims she was disqualified from employment at Rite Aid in April 2011 due to her signing of the statement when her tenure at CVS ended the previous year.

However, according to Moore, a copy of that statement was not provided to her along with Rite Aid’s adverse action notice.

Subsequent to receiving the initial notice letter, Moore initiated a dispute with LexisNexis that eventually resulted in the removal of her CVS statement from its “Esteem” database.

Moore’s initial complaint against Rite Aid was thrown out last July, though she was given leave to file an amended version, which she did in August.

In the amended version, Moore levied charges of willfully violating the FCRA against Rite Aid, through its failure to provide candidates disqualified from employment a copy of their background report or a copy of the FCRA summary of rights at least five business days before such classification occurred.

Rite Aid moved to dismiss Moore’s class action complaint in its entirety, which brought the matter before DuBois.

“First, the Court determines that plaintiff has adequately plead willfulness to the extent that she argues that Rite Aid actually rejected her application for employment prior to sending her the initial notice letter, background report, and summary of rights,” DuBois said.

“The FCRA explicitly provides that a denial of employment constitutes an adverse action and that an employer may not take such action before providing applicants with the background report and summary of rights. Given the clear language of the statute, plaintiff has sufficiently alleged that Rite Aid’s conduct in this regard was objectively unreasonable under the FCRA.”

DuBois continued, “Plaintiff alleges that Rite Aid informed her that she had five business days to respond to the initial notice letter but, in reality, implemented a policy that provided her with at most four business days to respond before denying her employment. The Court concludes that these allegations are sufficient to demonstrate that Rite Aid willfully misrepresented to plaintiff the amount of time that she would have to contact Rite Aid before the company took an adverse action against her, thus denying her a real opportunity to contest the background report and adjudication. For these reasons, plaintiff has stated a claim for willful violation.”

DuBois further ruled the complaint’s first count was based on “the allegation that plaintiff did not have sufficient time to challenge the background report and adjudication before Rite Aid took adverse action against her, because she did not have a copy of her voluntary admission statement from CVS upon which Lexis Nexis relied.”

Therefore, DuBois declared any future financial recovery under the complaint’s first count was limited to actual damages, court costs and attorneys fees – but further stipulated Rite Aid’s motion to dismiss the class action complaint was denied in all other respects.

DuBois concluded Rite Aid’s conduct was “objectively unreasonable in light of the clear state of the law” and Moore did state a “plausible” claim for willful violation.

The plaintiffs were seeking statutory and punitive damages, pre-judgment and post-judgment interest, attorneys fees, court costs and such other relief as the Court deems just and proper for all class members involved in this case. A jury trial is also demanded.

The plaintiffs are represented by James A. Francis, David A. Searles, Erin Amanda Novak and John Soumilas of Francis & Mailman in Philadelphia; Nadia Hewka and Sharon M. Dietrich of Community Legal Services in Philadelphia; Irv Ackelsberg of Langer Grogan & Diver; and Leonard A. Bennett of Consumer Litigation Associates in Newport News, Va.

The defendant is represented by Jonathan D. Wetchler, Alison C. Morris, Caroline Austin and Sean Zabaneh of Duane Morris, in Philadelphia.

U.S. District Court for the Eastern District of Pennsylvania case 2:13-cv-01515

From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at

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