The University of Miami revoked its job offer to Loudy Appolon, an African-American, after it received a negative (but mistaken) credit history report about her. In November 2010, Appolon filed a putative class action lawsuit against the University alleging disparate impact race discrimination. After the University revoked the offer, Appolon corrected the errors in the report and attempted to contact the University to notify it of the errors, but the University did not reinstate the job offer. Appolon’s putative class action lawsuit alleges that the University’s use of credit reports has a disparate impact on African-American and Latino applicants based on her belief that these groups were more likely to suffer economic hardships that adversely affect credit ratings. The lawsuit comes in the wake of the EEOC’s public meeting in October 2010 to discuss the use of credit checks by employers, as well as several recently enacted state laws addressing the same issue, and may be the first of several lawsuits challenging the practice.

TIP: Employers should consider their use of credit history reports and whether such reports are probative or necessary, especially as the EEOC’s focus on this area may lead to a wave of lawsuits challenging the practices.