Wednesday, March 4, 2015

The EEOC Experiences yet Another Background Check Court Loss

As we previously reported, the EEOC’s targeting of employer background checks has been controversial and continues to fizzle in the courts. Recently, in EEOC v. Freeman, the U.S. Court of Appeals for the Fourth Circuit affirmed a lower court’s grant of summary judgment to an employer. The Fourth Circuit found that the EEOC failed to establish a prima facie case of discrimination with respect to the employer’s background checks, because the EEOC’s expert testimony and corresponding statistical analysis was unreliable. This is the same reason that the EEOC’s background check lawsuit against Kaplan Higher Education failed last year before the US Court of Appeals for the Sixth Circuit. In fact, the same EEOC expert testified in that case as in the Freeman case, and the Sixth Circuit questioned his expertise and methodology. 

These court losses are important, because to prevail on a claim that an employer’s background check process or decisions are racially discriminatory, the EEOC must show a statistically significant disproportionate impact on applicants or employees of color. So far, the EEOC is struggling to make this showing.  Nevertheless, the EEOC is unlikely to retreat from its background check lawsuits. The EEOC identified eliminating barriers in recruitment and hiring as its top priority in its latest strategic enforcement plan. Consistent with this priority, the EEOC has additional background check cases pending against BMW Manufacturing Company and Dollar General. 

While employers might find some relief in the EEOC’s recent losses, they should continue to take care when conducting and making decisions based on background checks. As discussed in a prior post, there are procedural requirements to be followed to conduct background checks and discrimination law considerations to bear in mind. Employers should avoid automatic employment exclusions based on background check data, and instead conduct an individualized assessment that considers the conviction data and any actual, current risks posed based on the nature and needs of the position at issue. Additionally, employers should be mindful of state law requirements, as many states, including Minnesota, have laws regulating background checks and the timing of when an employer may make criminal history inquiries.

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