EEOC Rebuffed Again. Fourth Circuit Denies Disparate Impact Claim.
Feb 28, 2015
Last week the Equal Employment Opportunity Commission (EEOC) was handed another defeat in its ongoing attempts to exert its control in the area of employee background checks. The U.S. Court of Appeals for the Fourth Circuit denied the EEOC's claim of Disparate Impact in EEOC v. Freeman, No. 13-2365. This decision affirms the ruling from last August, where in the U.S. District Court for the District of Maryland, Judge Roger Titus dismissed the EEOC's case due to it using unreliable expert analysis. The EEOC had alleged that Freeman, Inc. had illegally employed background checks, resulting in a Disparate Impact on African-Americans and Hispanics.
This is now another setback for the EEOC in its attempts to regulate the use of background checks in the hiring process of employers. It is important to note that the EEOC does not govern the Fair Credit Reporting Act (FCRA - the federal law that regulates employee background checks). The FCRA is governed by the Consumer Financial Protection Bureau and the Federal Trade Commission.
However, ever since April 25, 2012, when the EEOC issued guidelines for employee background checks, the EEOC has tried to wield its power under Title VII (of the Civil Rights Act of 1964), claiming that these background checks may constitute illegal discrimination under the Disparate Impact regulations of Title VII. Title VII prohibits employment discrimination based on race, color, religion, sex and national origin.
Judge Steven Agee of the Fourth Circuit not only affirmed the decision by Judge Roger Titus from August of last year, but Judge Agee also specifically chastised the EEOC for its dubious litigation tactics in both this Freeman case and in other similar cases. He further claimed that the EEOC's Expert Witness utilized a small selected sample of background checks, instead of a larger and more statistically valid number of background checks. This methodology, Judge Agee wrote, not only skewed the results, but perhaps intentionally did so.
This decision by the Fourth Circuit will undoubtedly continue to weaken the EEOC's efforts to challenge the use of background checks by employers. As stated above, the EEOC has no enforcement power over the Fair Credit Reporting Act, and the EEOC's attempts to enter this sphere by claiming Title VII Disparate Impact violations are being minimized by courts, that are finding the EEOC's tactics and statistics to be suspect.
Posted by: Rudy Troisi. President, Reliable Background Screening.