The EEOC Loses Background Check Battle In The 6th Circuit


The Sixth Circuit issued a much anticipated ruling on April 9, 2014 related to the Equal Employment Opportunity Commission’s (“EEOC’s”) systemic targeting of employer background check policies.  The very first sentence of the Court’s decision very poignantly foreshadows how the EEOC was to fare in the seven page decision authored by Justice Raymond Kethledge, and also points out the difficulty the federal agency will face in light of its own background check policy in which it runs credit checks on applicants for 84 of the agency’s 97 positions:  “In this case the EEOC sued the defendants for using the same type of background check that the EEOC itself uses.”  (emphasis added).

Not surprisingly, the Circuit ultimately affirmed the lower court decision throwing out the EEOC’s lawsuit against higher education giant Kaplan, Inc. Specifically, the EEOC had alleged that Kaplan’s use of credit checks caused it to screen out more black applicants than white applicants, creating a disparate impact in violation of Title VII of the federal Civil Rights Act. See 42 U.S.C. § 2000e-2(a)(1), (a)(2), (k).

The Circuit Court noted that proof of disparate impact is usually statistical proof in the form of expert testimony.  The EEOC relied solely on statistical data compiled by a doctor of industrial and organizational psychology, but the lower court excluded the testimony on grounds that it was unreliable and granted summary judgment for Kaplan.  The Circuit Court stated that this was proper because the testimony did not satisfy any of the factors typically considered to determine reliability under the federal rules of evidence and the sample used was not representative of Kaplan’s applicant pool as a whole.

In a conclusion as scathing as the introductory paragraph, the Court called the EEOC’s expert data “homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself.”

This decision mirrors that of a Maryland district court this past August, which also threw out the EEOC’s expert testimony in granting summary judgment for the employer.  So far, it is EEOC— 0, Employers—3 in the federal courts.  The EEOC’s response: “We are reviewing the decision and considering our options.”  Stay tuned as courts consider this issue in different cases around the country over the next year.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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