Background Check Lawsuit Faces Problems as EEOC Pushes To Make Changes

Everyone deserves an equal chance when searching for a new job, and discrimination – whether it’s based on gender, age, race, or another protected characteristic – is illegal in the United States. The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws that protect workers against discrimination – and a recent push by the agency to expose the links between background checks and racial discrimination has resulted in a lawsuit against Kaplan, Inc. THE EEOC claims that Kaplan’s use of credit checks as part of its hiring process has a disparate impact on black applicants, thereby violating Title VII of the Civil Rights Act. The lawsuit has become a flash point for the agency’s wider criticism of companies that use credit and background checks when hiring new employees – but its claims that the checks discriminate against minorities have been widely challenged as too difficult to prove. This week, the Sixth Circuit Court ruled against the EEOC, and agreed with a previous ruling that the agency’s expert testimony in the Kaplan lawsuit deserved to be excluded. U.S. District Judge Patricia A. Gaughan made this ruling back in January – and last week, the appeals court showed their wholehearted approval for that exclusion, calling the “expert” a person with “no particular expertise” whose claims were “tested by no one.”

Even if the employer treated you the same as everyone else, using background information still can be illegal discrimination.

It’s a blow to the EEOC, but not a fatal one. The ruling hinges on how admissible one expert’s testimony was, rather than the legitimacy of the discrimination claims made against Kaplan.

On its website, the EEOC has just recently published new guidelines, “Background Checks: What Job Applicants and Employees Should Know,” explaining what employers must do before and after conducting background checks. In it, the agency reminders employees that:

As for the suit against Kaplan, the EEOC seems to have struggled to convince the courts that Kaplan’s background check policy had a direct impact on a particular pool of applicants (in this case, black or Latino individuals). While some statistics show a link between background checks (including criminal history checks) and discriminatory hiring practices, applying these broader correlations to specific businesses may prove tricky. It’s certainly stumped the EEOC for now, with their expert witness, a doctor of industrial and organization psychology, neither convincing the lower court that his methodology was sound, nor providing enough for the appeals court to reconsider the exclusion of his testimony.

Adding to its doubts, the Sixth Circuit also pointed out that “the EEOC sued the defendants for using the same type of background check that the EEOC itself uses.”

There’s certainly a problem, then. Companies have a legitimate interest in knowing who they’re hiring – including, in some cases, whether they have solid credit and/or a criminal history. The EEOC is eager to stop these checks from giving companies a way of identifying and discriminating (even unintentionally) against ethnic minorities. What’s the solution? That remains unclear, but this week’s rulings seem to suggest that the EEOC won’t be allowed to take legal action simply because it suspects discrimination might be occurring. Without specific data and concrete accusations, the courts have made it clear that the agency won’t have carte blanche approval to file suits.

Employers will, though, continue to face investigations by the EEOC over their background check policies. A more engaged and proactive EEOC is good for all workers – as long as they’re willing to pick their battles wisely and ensure they can support any claims they make against allegedly discriminatory businesses.