NOTICE OF CLASS ACTION SETTLEMENT GRECO V. SELECTION MANAGEMENT SYSTEMS, INC. San Diego Superior Court Case No CU-BT-CTL

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1 NOTICE OF CLASS ACTION SETTLEMENT GRECO V. SELECTION MANAGEMENT SYSTEMS, INC. San Diego Superior Court Case No CU-BT-CTL The Superior Court has authorized this notice. This is not a solicitation from a lawyer If you were the subject of an employment screening report by Selection Management Systems, Inc. between January 27, 2012 and December 31, 2014, you could receive a payment from a class action settlement THIS NOTICE CONCERNS YOUR LEGAL RIGHTS - PLEASE READ IT CAREFULLY The proposed class action settlement will create a settlement fund of $750,000 to compensate persons who were the subject of an employment screening report prepared by Selection Management Systems, Inc. (SMS). The report contained information about criminal charges that have been filed against you in the past but which did not result in a conviction. The settlement resolves a lawsuit over whether SMS violated the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681(c) by willfully reporting criminal charges that did not result in a conviction in employment screening reports that antedated the report by more than seven (7) years. The settlement avoids costs and risks to you from continuing the lawsuit, pays money to affected persons like you, and releases SMS from liability for the related claims. The two sides disagree on how much money could have been won (if any) if the class members won at trial. Your legal rights are affected whether you act, or don t act. Read this notice carefully. These rights and options - and the deadlines to exercise them - are explained in this notice. WHY ARE YOU RECEIVING THIS NOTICE? According to SMS s records, it issued an employment screening report about you to a potential employer between January 27, 2012 and December 31, This report contained the information about criminal charges that the lawsuit contends legally should not have been included. Therefore, you are a member of the proposed class. The Court sent you this Notice because you have the right to know about a proposed settlement of the class action and about all of your options before the Court decides whether to approve the proposed settlement. If the Court approves the settlement and after any objections or appeals are resolved, an administrator appointed by the Court will make the payments that the settlement allows. This Notice explains the lawsuit, the settlement, your legal rights and what benefits are available and how to get them. The Court in charge of this case is the San Diego Superior Court for the State of California, and the case is known as Greco v. Selection Management Systems, Inc, San Diego Superior Court Case No CU-BT-CTL. All Class Members who submit a Claim Form on a timely basis and do not exclude themselves from the settlement will receive the compensation provided for in the settlement and will be bound by the orders issued by the Court regarding the settlement. Page 1 of 6

2 BACKGROUND ON THE LAWSUIT AND SETTLEMENT The proposed Settlement Class covers the time period of January 27, 2012 to December 31, The case alleges defendant SMS violated a provision of the FCRA which prohibits consumer reporting agencies from including information about criminal arrests, indictments and charges that did not result in a conviction once it has been seven years past the date of the relevant incident. In other words, if someone is arrested and no charges are filed, this information can be included in a background report, but if it has been more than seven years, this information cannot be reported. The lawsuit seeks to obtain compensation for violation of this law. After more than one year of extensive investigation and comprehensive settlement negotiations, Plaintiff and Defendant have reached an agreement providing for the settlement of the lawsuit. The terms of the proposed Settlement are set forth in the Settlement Agreement filed with the Court. Plaintiff and Class Counsel have evaluated information made available in the course of the lawsuit and have taken into account the risks and uncertainties of proceeding with this litigation, including the risks and uncertainties of class certification, prevailing on the merits, proving damages at trial, and prevailing on post-trial motions and appeal. They have also considered SMS s documented limited financial resources, including the fact that the company has a $4 million tax lien against it and its insurance policy only provides coverage for claims and defense costs totaling up to $1 million. Based upon their consideration of these factors, Plaintiff and Class Counsel believe it is in the best interests of the Class to settle the lawsuit on the terms described below. SMS denies all allegations of wrongdoing and denies any liability. Nevertheless, it has agreed to settle the lawsuit for the purpose of avoiding the expense of further litigation. THE CLASS The Court has certified a class, for settlement purposes only, consisting of: All persons in the United States beginning January 27, 2012 and continuing through December 31, 2014 who were the subject of a consumer report published by Defendant SELECTION MANAGEMENT SYSTEMS, INC. in connection with their employment and/ or volunteer activities that contained adverse information other than records of convictions of crimes and which information antedated the report by more than seven years. The Parties and the Court have already determined that you are a Class Member. TERMS OF THE PROPOSED SETTLEMENT 1. Selection Management Systems, Inc. will pay $750,000 to compensate Class Members and the named Plaintiff, to pay for settlement administration costs including but not limited to the sending of this notice, to pay the attorney s fees and expenses of Class Counsel, and to pay an incentive award to the class representative plaintiff and to settle certain claims of the named Plaintiff. There is no reversion, meaning that SMS will pay the entire $750, This Settlement Fund will be allocated as follows: a) First, the settlement administrator, ILYM Group, Inc., will receive up to $140,000 for settlement administration, including sending the class notice, receiving and processing claims and making the settlement payments. Page 2 of 6

3 b) Second, the amount of money awarded by the Court for attorney s fees and litigation costs will be deducted from the fund. Class Counsel will ask the Court to award a maximum of $250,000 in fees and litigation costs (1/3 of the total Fund). The Court may award that amount or less but not more. c) Third, Class Counsel will also ask the Court to award a $5,000 incentive award to the named Plaintiff who brought this lawsuit on your behalf and was appointed class representative by the Court. In addition, the Plaintiff has individual claims under a different law that is not available in a class action. Defendant has agreed to pay him $20,000 in settlement of his individual claims that are not being asserted by the class. None of the Class Members are releasing Defendant with respect to any claims under that different law. d) Finally, each Class Member who submits a timely Claim Form will receive a pro rata share of the remaining Settlement Fund up to $1,000 based upon the number of claims received. This amount may be less depending on the number of claims. YOUR RIGHTS TO PARTICIPATE IN, EXCLUDE YOURSELF FROM, OR OBJECT TO THE SETTLEMENT Your options are to: 1. Submit a Claim Form and Receive Compensation If you return the attached Claim Form postmarked no later than May 29, 2015 or submit a Claim Form online at no later than May 29, 2015, then you remain a Class Member and will automatically be paid the compensation described above if the Settlement is approved by the Court. You will also be bound by the Settlement Release. In order to participate in the settlement you must sign and submit the attached Claim Form to the Greco v. Selection Management Systems, Inc. class action settlement administrator, ILYM Group, Inc., at P.O. Box 57087, Irvine CA 92619, or submit a Claim Form online at The Claim Form must be postmarked or submitted online no later than May 29, Exclude Yourself from the Settlement and Do Not Receive Compensation If you do not want to be bound by this Settlement, you must request to be excluded from the Class. If you request to be excluded from the Class, you will retain any individual rights you have against SMS and will not have released it from any claims. However, you will not receive the compensation described above. Also, you may not object to the Settlement under this option. If you wish to be excluded from the Class, you must submit a written request for exclusion addressed to the Selection Management Systems, Inc. class action settlement administrator, ILYM Group, Inc., at P.O. Box 57087, Irvine CA The request must be postmarked no later than May 14, To be valid, your request must: (1) state that you wish to be excluded from the Selection Management Systems, Inc. Settlement; (2) contain your name, address and telephone number and last four digits of your social security number; (3) be signed by you. DO NOT SUBMIT BOTH A CLAIM FORM AND A REQUEST FOR EXCLUSION FORM. If you submit both, the Request for Exclusion will be invalid, you will be included in the Settlement Class, and you will be bound by the terms of the Settlement. Page 3 of 6

4 3. Object to the Settlement If you want to express an objection to part or all of the settlement, you may appear at the Final Approval Hearing and/or object to the proposed Settlement. If the settlement is approved, you will still receive the settlement compensation and be bound by the Settlement Release. If you wish to object or to appear at the Final Approval Hearing, you must file a written notice of objection stating your reasons for objecting and whether you or your attorney will appear at the Final Approval Hearing. To be valid, your objection must be filed with the San Diego Superior Court no later than May 14, 2015 with copies served on: Class Counsel Jeffrey Spencer THE SPENCER LAW FIRM 903 Calle Amancer, Suite 220 San Clemente, California Counsel for Selection Management Systems, Inc. Tim J. Vanden Heuvel LEWIS BRISBOIS BISGAARD & SMITH, LLP 701 B Street, Suite 1900 San Diego, California You have the right to consult and/or retain an attorney of your choice at your own expense to advise you regarding the Settlement and your rights in connection with the Settlement and the Final Approval Hearing described below. You also have the right either personally, or through an attorney retained or paid by you, to seek to intervene in the Action. IF YOU INTEND TO OBJECT TO THE SETTLEMENT, BUT WISH TO RECEIVE YOUR SHARE OF THE SETTLEMENT PROCEEDS, YOU MUST TIMELY SUBMIT YOUR CLAIM FORM TO THE CLAIMS ADMINISTRATOR AS STATED ABOVE. If the court approves the settlement despite any objections, you will not receive any settlement proceeds unless you have timely submitted your claim form. 4. Do Nothing and Receive no compensation and give up your rights against Selection Management Systems, Inc. In order to receive a settlement payment you must timely submit a Claim Form as described above. In order to request exclusion and preserve your right to pursue your own action against Selection Management Systems, Inc. you must timely submit a Request for Exclusion as described above. If you do nothing, if the settlement is approved you will receive no compensation and will lose your right to pursue your own lawsuit against Selection Management Systems, Inc. for the claims released in the settlement. RELEASE OF CLAIMS If the Court approves the Settlement, and you have not excluded yourself as described above, you will be bound by the Settlement and will be forever barred from suing Selection Management Systems, Inc. and related companies for the claims released in the settlement. This applies whether you currently know about the existence of such claims or not. Here are the claims you will give up: (a) All Claims within the Class Period (January 27, 2012 and December 31, 2014) for willful, intentional or reckless publishing of criminal charges that did not result in a conviction in employment screening reports that antedated the report by more than seven (7) years [as defined by FCRA 616 (15 U.S.C. 1681n)] violations of FCRA 605(a)(2) (15 U.S.C. 1681c(a)(2)) or under FCRA 605(a)(5) (15 U.S.C. 1681c(a)(5)), and all Claims for willful, intentional or reckless violation of FCRA State Equivalents comparable to FCRA 605(a)(2) (15 U.S.C. 1681c(a)(2)) or FCRA 605(a)(5) (15 U.S.C. 1681c(a)(5)), related to any consumer reports prepared by SMS (1) for an employment purpose, and (2) for a volunteer position, including specifically all Claims alleging that it was willfully, intentionally or recklessly in violation of the Page 4 of 6

5 FCRA or any FCRA State law equivalents to report Non-Conviction Count Information. This release shall specifically include any claims for damages, specifically including statutory damages, arising under FCRA 616 (15 U.S.C. 1681n)] or FCRA State Equivalents for willful, intentional or reckless violation of said statutes in any way related to the reporting of Non-Conviction Count Information. Here are the claims you will not give up: (a) This release shall not bar claims by any Settlement Class Member for actual damages related to the negligent violation of the FCRA pursuant to FCRA 617 (15 U.S.C. 1681o) or State law equivalents. FINAL APPROVAL HEARING Purpose of Final Approval Hearing The Court has scheduled a Final Approval Hearing to determine whether the Court should approve the Settlement as fair, reasonable, and adequate, and whether judgment should be entered in accordance with the Settlement Agreement. The Court will also consider at the Final Approval Hearing the request of Class Counsel for an award of attorney s fees and reimbursement of expenses as well as the request of named Plaintiff for an award for services rendered on behalf of the Class. Time and Location of Hearing The Final Approval Hearing will occur at 10:30 a.m. on July 17, 2015 in Department C-68 of the San Diego Superior Court, Central Courthouse, 220 West Broadway, San Diego, CA Attendance at Final Approval Hearing Your attendance at the Final Approval Hearing is not required. However, you may be heard orally at the hearing in opposition to the proposed Settlement only if you have timely filed written objections in the manner described above, including a statement that you intend to appear and be heard at the Final Approval Hearing. You may also enter an appearance through an attorney retained at your own expense. If you do not enter an appearance through an attorney, and do not object, Class Counsel will represent you at the hearing. FURTHER INFORMATION This Notice's description of the case and the settlement is general. For more details of the matters involved in this lawsuit and the settlement, you may review the settlement agreement and related pleadings as set forth below. Inquiries regarding Settlement benefits and procedures may be directed to the claims administrator, ILYM Group, Inc., at (844) , or may be directed to Class Counsel at the address specified above, or by means of telephone to or or at or You can also review the Settlement Documents at and at If you wish to review the Court's docket in this case, you may do so by visiting the Court's public access website. Direct your browser to the register of actions link and then enter case number You may view the Court's docket from here, including but not limited to documents filed with the Court (on the Register of Actions ), rulings and orders, and other information. DO NOT TELEPHONE OR ADDRESS ANY QUESTIONS ABOUT THE CASE TO THE CLERK OF THE COURT OR TO THE JUDGE. They are not permitted to answer your questions. THE COURT Page 5 of 6

6 EXPRESSES NO VIEW AS TO THE MERITS OF ANY CLAIMS OR DEFENSES ASSERTED BY ANY PARTY TO THE COMPLAINT. Page 6 of 6

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