UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

 

______________________________

)

In the Matter of ) FILE NO. 962 3086

)

BRUNO'S, INC., ) AGREEMENT CONTAINING CONSENT

a corporation. ) ORDER TO CEASE AND DESIST

______________________________) 

 

The Federal Trade Commission having initiated an

investigation of certain acts and practices of Bruno's, Inc., a

corporation, and it now appearing that Bruno's, Inc., a

corporation, hereinafter sometimes referred to as proposed

respondent, without acknowledging the violation of any law or

rule or regulation, is willing to enter into an agreement

containing an order to cease and desist from the use of the acts

and practices being investigated,

IT IS HEREBY AGREED by and between Bruno's, Inc., by its

duly authorized officer, and its attorney, and counsel for the

Federal Trade Commission that:

1. Proposed respondent Bruno's, Inc. is a corporation

organized, existing and doing business under and by virtue of the

laws of the State of Alabama, with its office and principal place

of business located at 800 Lakeshore Parkway, Birmingham, Alabama 

35235.

2. Proposed respondent admits all the jurisdictional facts

set forth in the draft of complaint here attached.

3. Proposed respondent waives:

(a) Any further procedural steps;

(b) The requirement that the Commission’s decision 

contain a statement of findings of fact and conclusions

of law; and

(c) All rights to seek judicial review or otherwise to

challenge or contest the validity of the order entered

into pursuant to this agreement.

4. This agreement shall not become part of the public

record of the proceeding unless and until it is accepted by the

Commission. If this agreement is accepted by the Commission, it,
PAGE 2 OF 6

together with the draft of complaint contemplated thereby, will

be placed on the public record for a period of sixty (60) days

and information in respect thereto publicly released. The

Commission thereafter may either withdraw its acceptance of this

agreement and so notify the proposed respondent, in which event

it will take such action as it may consider appropriate, or issue

and serve its complaint (in such form as the circumstances may

require) and decision, in disposition of the proceeding.

5. This agreement is for settlement purposes only and does

not constitute an admission by proposed respondent that any law

has been violated as alleged in the draft of complaint here

attached.

6. This agreement contemplates that, if it is accepted by

the Commission, and if such acceptance is not subsequently

withdrawn by the Commission pursuant to the provisions of § 2.34

of the Commission’s Rules, the Commission may, without further

notice to proposed respondent, (1) issue its complaint

corresponding in form and substance with the draft of complaint

here attached and its decision containing the following order to

cease and desist in disposition of the proceeding and (2) make

information public in respect thereto. When so entered, the

order to cease and desist shall have the same force and effect

and may be altered, modified, or set aside in the same manner and

within the same time provided by statute for other orders. The

order shall become final upon service. Delivery by the United

States Postal Service of the complaint and decision containing

the agreed-to order to proposed respondent’s address as stated in

this agreement shall constitute service. Proposed respondent

waives any right it may have to any other manner of service. The

complaint may be used in construing the terms of the order, and

no agreement, understanding, representation, or interpretation

not contained in the order or the agreement may be used to vary

or contradict the terms of the order.

7. Proposed respondent has read the proposed complaint and

order contemplated hereby. It understands that once the order

has been issued, it will be required to file one or more

compliance reports showing that it has fully complied with the

order. Proposed respondent further understands that it may be

liable for civil penalties in the amount provided by law for each

violation of the order after it becomes final.
PAGE 3 OF 6

ORDER

For the purpose of this Order, the terms “consumer,”

“consumer report,” and “consumer reporting agency” shall be

defined as provided in Sections 603(c), 603(d), and 603(f),

respectively, of the Fair Credit Reporting Act, 15 U.S.C. 

§§ 1681a(c), 1681a(d), and 1681a(f).

I.

IT IS ORDERED that respondent Bruno's, Inc., a corporation,

its successors and assigns, and its officers, agents,

representatives, and employees, directly or through any

corporation, subsidiary, division, or other device, in connection

with any application for employment, do forthwith cease and

desist from failing, whenever employment is denied either wholly

or partly because of information contained in a consumer report

from a consumer reporting agency, to disclose to the applicant

for employment at the time such adverse action is communicated to

the applicant (a) that the adverse action was based wholly or

partly on information contained in such a report and (b) the name

and address of the consumer reporting agency making the report. 

Respondent shall not be held liable for a violation of Section

615(a) of the Fair Credit Reporting Act if it shows by a

preponderance of the evidence that at the time of the alleged

violation it maintained reasonable procedures to assure

compliance with Section 615(a) of the Fair Credit Reporting Act.

II.

IT IS FURTHER ORDERED that respondent, and its successors

and assigns, shall for at least five (5) years from the date of

issuance of this Order, maintain and upon request make available

to the Federal Trade Commission for inspection and copying,

documents demonstrating compliance with the requirements of 

Part I of this Order, such documents to include, but not be

limited to, all employment evaluation criteria relating to

consumer reports, instructions given to employees regarding

compliance with the provisions of this Order, all written notices

or a written or electronically stored notation of the description

of the form of notice and date such notice was provided to

applicants pursuant to any provisions of this Order, and the

complete application files for all applicants for whom consumer

reports were obtained for whom offers of employment are not made

or have been withheld, withdrawn, or rescinded based, in whole or

in part, on information contained in a consumer report.
PAGE 4 OF 6

III.

IT IS FURTHER ORDERED that respondent shall deliver a copy

of this Order at least once per year for a period of five (5)

years from the date of issuance this Order, to all persons

responsible for the respondent’s compliance with Section 615(a)

of the Fair Credit Reporting Act.

IV.

IT IS FURTHER ORDERED that respondent shall notify the

Federal Trade Commission at least thirty (30) days prior to any

proposed change in the corporate structure of respondent such as

dissolution, assignment, or sale resulting in the emergence of a

successor operation, the creation or dissolution of subsidiaries

or divisions, or any other change in the corporation which may

affect compliance obligations arising out of the Order.

V.

IT IS FURTHER ORDERED that respondent shall, within sixty

(60) days of service of this Order, file with the Federal Trade

Commission a report, in writing, setting forth in detail the

manner and form in which is has complied with this Order.

VI.

IT IS FURTHER ORDERED that this Order will terminate twenty

(20) years from the date of its issuance, or twenty (20) years

from the most recent date that the United States or the Federal

Trade Commission files a complaint (with or without an

accompanying consent decree) in federal court alleging any

violation of the Order, whichever comes later; provided, however,

that the filing of such a complaint will not affect the duration

of:

A. Any paragraph in this Order that terminates in less

than twenty (20) years;

B. This Order's application to any respondent that is not

named as a defendant in such complaint; and

C. This Order if such complaint is filed after the Order

has terminated pursuant to this paragraph.

Provided further, that if such complaint is dismissed or a

federal court rules that the respondent did not violate any

provision of the Order, and the dismissal or ruling is either not
PAGE 5 OF 6

appealed or upheld on appeal, then the Order will terminate

according to this paragraph as though the complaint was never

filed, except that the Order will not terminate between the date

such complaint is filed and the later of the deadline for

appealing such dismissal or ruling and the date such dismissal or

ruling is upheld on appeal.

Signed this day of , 1996.

BRUNO'S, INC.,

a corporation

By: ___________________________

R. MICHAEL CONLEY

Corporate Counsel

Bruno's, Inc.

By: ____________________________

RICHARD MARTY

Vice President, Human Resources

Bruno's, Inc.
PAGE 6 OF 6

FEDERAL TRADE COMMISSION

By: ___________________________

 W. DAVID GRIGGS

 Counsel for the Federal Trade 

Commission

APPROVED:

____________________________

THOMAS B. CARTER, Director

Dallas Regional Office

CONCUR:

____________________________

JOAN Z. BERNSTEIN

Director

Bureau of Consumer Protection
UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

___________________________________

)

In the Matter of )

) DOCKET NO.

BRUNO'S INC., )

a corporation )

___________________________________)

COMPLAINT

Pursuant to the provisions of the Fair Credit Reporting Act,

15 U.S.C. § 1681 et seq., and the Federal Trade Commission Act,

15 U.S.C. § 41 et seq., and by virtue of the authority vested in

it by said Acts, the Federal Trade Commission, having reason to

believe that Bruno's, Inc., a corporation, hereinafter referred

to as respondent, has violated the provisions of said Acts, and

it appearing to the Commission that a proceeding by it in respect

thereof would be in the public interest, hereby issues its

complaint, stating its charges in that respect as follows:

DEFINITIONS

For the purposes of this Complaint, the following

definitions are applicable. The terms “consumer,” “consumer

report,” and “consumer reporting agency” shall be defined as

provided in Sections 603(c), 603(d), and 603(f), respectively, of

the Fair Credit Reporting Act, 15 U.S.C. §§ 1681a(c), 1681a(d)

and 1681a(f).

PARAGRAPH ONE: Respondent Bruno's, Inc. is a corporation

organized, existing and doing business under and by virtue of the

laws of the State of Alabama, with its office and principal place

of business located at 800 Lakeshore Parkway, Birmingham, Alabama 

35235.

PARAGRAPH TWO: Respondent, in the ordinary course and

conduct of its business, uses information in consumer reports

obtained from consumer reporting agencies in the consideration,

acceptance, and denial of applicants for employment with

respondent.

PARAGRAPH THREE: The acts and practices of respondent

alleged in this complaint have been in or affecting commerce, as

“commerce” is defined in the Federal Trade Commission Act.
PAGE 2 OF 2

PARAGRAPH FOUR: Respondent, in the ordinary course and

conduct of its business, has denied applications or rescinded

offers for employment with respondent based in whole or in part

on information supplied by a consumer reporting agency, but has

failed to advise consumers that the information so supplied

contributed to the adverse action taken on their applications or

offers for employment, and has failed to advise consumers of the

name and address of the consumer reporting agency that supplied

the information.

PARAGRAPH FIVE: By and through the practices described in

Paragraph Four, respondent has violated the provisions of Section

615(a) of the Fair Credit Reporting Act, 15 U.S.C. § 1681m(a).

PARAGRAPH SIX: By its aforesaid failure to comply with

Section 615(a) of the Fair Credit Reporting Act and pursuant to

Section 621(a) thereof, respondent has engaged in unfair and

deceptive acts or practices in or affecting commerce in violation

of Section 5(a)(1) of the Federal Trade Commission Act.

WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade

Commission on this day of , 1997, issues this

complaint against respondent.

By the Commission.

Donald S. Clark

Secretary

SEAL
PAGE 1 OF 2

Analysis of Proposed Consent Order

to Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to final approval, to a

proposed consent order from respondent Bruno’s, Inc.

The proposed consent order has been placed on the public record for sixty (60) days for

reception of comments by interested persons. Comments received during this period will become

part of the public record. After sixty (60) days, the Commission will again review the agreement

and the comments received and will decide whether it should withdraw from the agreement and

take other appropriate action or make final the agreement's proposed order.

This matter concerns notification requirements under the Fair Credit Reporting Act, 15

U.S.C. § 1681. That statute requires, among other things, that employment applicants, who are

denied employment, either in whole or in part, because of information in consumer reports

obtained from consumer reporting agencies, be provided with the name and address of the agency

making the consumer report. The failure to provide the notice required by the statute lessens

consumers’ access to information that may have led to the denial of employment. Proper notice

assists consumers in discovering inaccurate or obsolete information in consumer reports that the

consumers can subsequently dispute and correct. The use of consumer reports to assist in

evaluating employment applications has become increasingly popular in recent years and,

consequently, the significance of this notification requirement has heightened. 

The Commission’s complaint alleges that Bruno’s, Inc., has denied employment

applications based, in whole or in part, on information contained in consumer reports, failed to

advise such job applicants that the denial was based in whole or in part on information contained

in a consumer report, and failed to supply such applicants with the name and address of the

agency making the report, as required by Section 615(a) of the Fair Credit Reporting Act, 15

U.S.C. § 1681m(a). The complaint also alleges that the failure to advise these job applicants

constitutes a violation of Section 615(a) of the Fair Credit Reporting Act, 15 U.S.C. § 1681m(a).

The complaint further alleges that, pursuant to Section 621(a) of the Fair Credit Reporting Act,

15 U.S.C. § 1681s, a violation of Section 615(a) constitutes an unfair or deceptive act or practice

in violation of Section 5(a)(1) of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1).

The proposed consent order contains provisions designed to prevent the respondents from

engaging in similar acts and practices in the future. 

Part I of the consent agreement requires Bruno’s, Inc., to cease and desist failing to

provide the notice required by Section 615(a) to employment applicants whose applications were

denied in whole or in part because of information in a credit report. Part I provides that Bruno’s,

Inc., may not be held liable for the failure to provide such notices if it demonstrates by a
PAGE 2 OF 2

preponderance of evidence that it had instituted reasonable procedures to comply with Section

615(a).

Paragraph II requires Bruno’s to maintain documents demonstrating its 615(a) compliance

for a period of five years from the issuance date of the order and to make the documents available

upon request to the FTC for inspection and copying. Paragraph III requires Bruno’s to deliver

copies of the Order, at least once per year for a period of five years from the date of issuance, to

all persons responsible for its compliance. Paragraph IV requires Bruno’s to notify the

Commission within 30 days of changes in corporate structure for the duration of the order. 

Paragraph V provides for the filing of a compliance report with the Commission within 60 days of

the issuance date of the order. Finally, Paragraph VI contains a sunset provision, which

terminates the order 20 years after issuance. 

The purpose of this analysis is to facilitate public comment on the proposed consent order. 

It is not intended to constitute an official interpretation of the agreement and proposed order or to

modify in any way their terms.