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PeopleFacts has agreed to a $2.4 million settlement with job applicants who claim their criminal histories were shared with employers without the legally required notice under the Fair Credit Reporting Act (FCRA), according to a motion filed in Michigan federal court.

The deal, reached with Pluto Acquisition Opco LLC, which operates as PeopleFacts LLC, comes after allegations that the company ignored notice and certification obligations when sending background reports to employers.

U.S. District Judge Robert J. White granted preliminary approval in June and set Oct. 20 for a final approval hearing.

Nearly 19,000 Job Seekers Eligible for Payments

According to court filings, 18,965 job applicants could receive checks of approximately $126 each as part of the monetary settlement class. These individuals allegedly were not informed that PeopleFacts was reporting their criminal history to prospective employers.

Separately, a sweeping injunctive relief class of about 4.4 million people will not receive direct payments but will benefit from new compliance procedures PeopleFacts has agreed to adopt to align with FCRA certification requirements.

The FCRA requires consumer reporting agencies to confirm that employers disclose to applicants and obtain their authorization before requesting background checks.

The Case That Sparked the Settlement

The lawsuit was filed in 2023 by Vidal McDowell, who alleged he lost a job after PeopleFacts incorrectly reported that he had been convicted of murder and felony weapons charges. McDowell had overturned those convictions on appeal, but the background check still showed them as active.

He further alleged that PeopleFacts never notified him at the time it transmitted the damaging report to his prospective employer, a step required under the FCRA whenever adverse public record information is shared.

Attorney Fees and Legal Complexity

McDowell’s attorneys—Morgan & Morgan PA and Consumer Litigation Associates—have requested $800,000 in legal fees from the $2.4 million fund.

The firms argued the case was unusually complex because the FCRA provisions at issue are rarely litigated. To prevail, the class would have needed to prove willful violations, a high bar that McDowell’s counsel said was “no easy task.”

They also noted PeopleFacts was prepared to challenge both McDowell’s individual standing and that of absent class members—issues they described as “make or break” for the entire case.

Legal Representation

• For McDowell and the class: Marc R. Edelman and Anna S. Kozak of Morgan & Morgan PA, and Craig C. Marchiando of Consumer Litigation Associates.

• For PeopleFacts: Jeffrey S. Hengeveld and Erik Johnson of Plunkett Cooney PC.

Counsel for both sides did not immediately respond to requests for comment on Wednesday.