The Sixth Circuit Court of Appeals recently affirmed a district court ruling rejecting a challenge by the Equal Employment Opportunity Commission (“EEOC”) to employers’ use of credit checks in the employee hiring process. In EEOC v. Kaplan Higher Education Corp., the Sixth Circuit dismissed the EEOC’s claim that Kaplan’s use of credit checks caused the company to screen out more African-American applicants than Caucasian applicants, thereby creating a disparate impact in violation of Title VII of the Civil Rights Act. The court noted that the EEOC sued Kaplan for using the same type of background check that the EEOC itself uses as part of its own hiring practices. 

The EEOC offered an expert witness to show that Kaplan’s credit checks had a disparate impact on African-American applicants even though the credit-check process was “racially blind.” However, the court of appeals affirmed the district court’s decision to exclude the expert witness, holding that the expert’s proposed testimony rested entirely on an unreliable “homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself.” The Sixth Circuit’s rejection of this attempted method of proof will likely be a significant setback to the EEOC’s ability to bring large scale disparate impact cases based on the use of credit checks in hiring.