The EEOC has taken a lot of heat on its controversial stance of aggressively litigating adverse impact cases involving background checks. In April, 2012, the EEOC issued a new enforcement guidance seeking to curtail the uses of criminal background checks in employment. That guidance resulted in the State of Texas filing a federal lawsuit challenging the EEOC’s authority over state agency hiring practices, and a series of EEOC initiated actions against large employers across the country.

On Friday, February 20, a panel of judges from the United States Court of Appeals for the Fourth Circuit, hammered the EEOC in a case involving an employer’s use of both a credit check and criminal background check during its hiring process. The lower court dismissed the case, and the appeals court agreed, noting that the EEOC’s statistics expert was “utterly unreliable” and “made a mind-boggling number of errors.” Remarkably, the court rebuked the EEOC’s continued use of this expert (who has been found to be biased in earlier cases) as “not serving the public interest well.” A copy of the decision can be found here.

This case is important because the EEOC’s enforcement position on the use of background checks rests almost exclusively on statistics. If the EEOC is willing to rely upon a biased manipulation of statistics, it is hard to imagine how an employer will get a fair shake during the charge process. This case is also a bell-weather of how the EEOC’s aggressive position on background checks will be received by the courts. Thus far, the EEOC has enjoyed very little success on these types of claims.