Criticizing the EEOC for placing employers in a "Hobson's choice" related to the criminal and credit background check of job applicants, the federal district court in Maryland threw out the EEOC's lawsuit against an event planning company for using criminal and credit information in hiring decisions.
The EEOC sued the company, alleging that its use of criminal and credit background checks violated Title VII. The court granted summary judgment for the company, holding that the EEOC failed to meet its burdens to establish a disparate impact claim. The court identified numerous inaccuracies, deficiencies, and biases in the expert statistical evidence presented by the EEOC. The court also faulted the EEOC for failing to identify specifically at which point in the company's multistep use of background information the alleged disparate impact occurred.
The court concluded that the lawsuit was a "theory in search of facts." It rebuked the EEOC for bringing an unsupported lawsuit that placed employers in the lose-lose position of choosing between ignoring criminal and credit history at the risk of potential liability and "incurring the wrath of the EEOC" for using information that, in the court's opinion, is a "rational and legitimate component" of the hiring process.
The EEOC recently filed two complaints against other companies challenging their use of criminal background checks in hiring. We are likely to see more enforcement effort by the EEOC in this area, and more judicial guidance as courts weigh in on those efforts.