A new lawsuit alleges Home Depot U.S.A. Inc.‘s background-check authorization form doesn’t comply with federal fair credit reporting law and has been used to violate the privacy and other rights of more than 1,000 workers nationwide.

The form includes language stating that job applicants and existing employees will hold the home improvement giant harmless on any claims they might have stemming from a signed background-check authorization, the proposed class action filed Feb. 1 in the U.S. District Court for the Northern District of California says.

That violates the Fair Credit Reporting Act, Ross Mitchell alleges. The FCRA mandates that...