Earlier this session, in Equal Employment Opportunity Commission (“EEOC”) v. Freeman, No. 13-2365 (4th Cir. Feb. 20, 2015), the Fourth Circuit affirmed the award of summary judgment against the EEOC in its suit alleging that the defendant’s use of credit and criminal background checks had a “disparate impact” on black male job applicants in violation of Title VII of the Civil Rights Act of 1964. Just as in the Sixth Circuit’s ruling last year in EEOC v. Kaplan Higher Education Corp., 748 F.3d 749 (6th Cir. 2014), in Freeman, the Court rejected the proposed expert testimony of Kevin R. Murphy because it lacked the necessary indicia of reliability.
The Fourth Circuit found that the sheer number of mistakes and omissions in the expert’s analysis rendered it “outside the range where experts might reasonably differ.” In a separate concurring opinion, Judge G. Steven Agee stated, “[I]t troubles me that the Commission continues to proffer expert testimony from a witness whose work has been roundly rejected in our sister circuits for similar deficiencies to those we observe here. It is my hope that the agency will reconsider pursuing a course that does not serve it or the public interest well.”
By way of background, the defendant is a family-owned company with almost 30,000 full-time, part-time, and seasonal workers. The company experienced significant problems involving larceny, drug abuse, and workplace violence. As early as 2001, the company started conducting background checks on the credit and criminal histories of persons applying for positions with access to money or sensitive financial information.
The EEOC began its investigation of the employer’s background check procedures after an applicant who was denied a position filed a charge. The investigation concluded that the policies violated Title VII. After an unsuccessful conciliation, the EEOC filed suit alleging that the company’s background checks had a disparate impact on black male job applicants.
In the lead-up to trial, the EEOC produced an expert report authored by Kevin R. Murphy, an industrial/organizational psychologist. More than a week after the deadline for expert disclosures, the EEOC amended its already-disclosed report with slightly modified calculations. The employer subsequently moved to exclude the expert report and also moved for summary judgment.
The district court granted the company’s motion to exclude the testimony, finding the expert report “rife with analytical errors” and “completely unreliable.” The lower court also granted the employer’s motion for summary judgment.
The Fourth Circuit noted that the district court exercises a special gatekeeping obligation in determining the reliability of expert witnesses. The Court iterated that the lower court identified “an alarming number of errors and analytical fallacies” in the expert’s reports, “making it impossible to rely on any of his conclusions.” The expert failed to include hundreds, if not thousands, of applicants in an attempt to skew the results of his statistical analysis.
More troubling, though, were the “mind-boggling” number of errors and unexplained discrepancies in the expert’s database. Although the EEOC claimed the errors were present in the original data, the Court noted that the discovery materials made it clear that it was “Mr. Murphy who introduced these errors into his own analysis.” The sheer number of errors in the expert’s methodology indicated that the district court did not abuse its discretion in excluding the agency’s expert reports as unreliable under Federal Rule of Evidence 702.
In his concurrence, Judge Agee noted that the problems are particularly “disquieting in the context of what appears to be a pattern of suspect work from Murphy.” He referenced a decision by the Eleventh Circuit in addition to several district court opinions that rejected Murphy’s expert testimony for various reasons. Thus, it was quite troubling that “[d]espite Murphy’s record of slipshod work, faulty analysis, and statistical sleight of hand, the EEOC continues on appeal to defend his testimony.”
Judge Agee concluded his concurring opinion by noting why the EEOC’s conduct in this case is so alarming: The Commission “wields significant power” that can be “expected to have broader consequence.” When it wields that power, it “must be constantly vigilant that it does not abuse the power conferred upon it by Congress.” Here, however, the EEOC’s actions suggested “that its exercise in vigilance has been lacking.”
The Fourth Circuit’s opinion in Freeman confirms that litigants should take seriously Rule 702’s requirement that expert testimony must have an adequate foundation and contain sufficient indicia of reliability. On a broader level, the Court’s opinion underscores the importance of retaining well-qualified and thorough experts with proven track records.
