Court Cancels EEOC’s Credit Check Case

By John Alan Doran

The EEOC’s assertion that new-hire credit checks can give rise to disparate impact claims took yet another much-deserved hit yesterday. Noting that “the EEOC sued the defendants for using the same type of background check that the EEOC itself uses,” the Sixth Circuit Court of Appeals put an end to an EEOC credit check lawsuit against a test-preparation company. Please click here to view the Sixth Circuit Court of Appeals decision.

The Court found that the trial court properly excluded the EEOC’s “expert witness,” which meant that the EEOC could not prove that Kaplan’s pre-hire credit checks caused any disparate impact. For the Mad Magazine cognoscente, the expert’s “analysis” reads like something from a Spy vs. Spy cartoon. The “expert” reviewed credit applications processed by only one of Kaplan’s many credit check vendors. But the credit check data did not include the races of the applicants, so the expert subpoenaed the applicants’ drivers’ licenses from forty-seven states, and hired five assistants to look at the drivers’ license photos and visually determine the race of each applicant. What? The Court of Appeals hammered the EEOC, noting that the EEOC itself uses credit checks, the EEOC itself strongly discourages employers from visually identifying employees by race, and the expert’s tactics were nothing more than a “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 by only the witness himself.” ‘Nuff said!