The EEOC has recently initiated a number of publicized actions against retailers, claiming their use of criminal background checks in the hiring process has an unlawful adverse impact upon certain populations. In a recent decision, a federal district court granted summary judgment in favor of a company whom the EEOC alleged used criminal background checks in a manner that adversely impacted African-Americans and men. EEOC v. Freeman, Case No. RWT 09cv2573 (D. Md. Aug. 9, 2013). Although the holding turned on the EEOC’s failure to submit admissible evidence from its expert witness regarding the alleged disparate impact, the court’s opinion contains many of the following instructive and common sense observations that retailers may find worthy of attention.

For many employers, conducting a criminal history or credit record background check ona potential employee is a rational and legitimate component of a reasonable hiring process. Thereasons for conducting such checks are obvious. Employers have a clear incentive to avoidhiring employees who have a proven tendency to defraud or steal from their employers, engagein workplace violence, or who otherwise appear to be untrustworthy and unreliable. However,under Title VII of the Civil Rights Act of 1964, a specific hiring policy may constitute anunlawful employment practice if it has a disparate impact on the basis of race, color, religion, sexor national origin and the employer fails to demonstrate that the challenged practice is job-relatedfor the position in question and consistent with business necessity. 42 U.S.C. § 2000e–2(k)(1)(A)(i).

As the agency responsible for investigating possible violations of the Act and enforcinganti-discrimination laws in the employment realm, the EEOC has brought this action against theDefendant, Freeman, alleging that it has implemented a hiring policy that, though faciallyneutral, has a discriminatory effect on African-American and male applicants…Because of the higher rate of incarceration of African-Americans than Caucasians,indiscriminate use of criminal history information might have the predictable result of excludingAfrican-Americans at a higher rate than Caucasians. Indeed, the higher incarceration rate mightcause one to fear that any use of criminal history information would be in violation of Title VII.

However, this is simply not the case. Careful and appropriate use of criminal history informationis an important, and in many cases essential, part of the employment process of employersthroughout the United States. As Freeman points out, even the EEOC conducts criminalbackground investigations as a condition of employment for all employees, and conducts creditbackground checks on approximately 90 percent of its positions. Thus, it is not the mere use of any criminal history or credit information generally that isa matter of concern under Title VII, but rather what specific information is used and how it isused. Because of this, it is simply not enough to demonstrate that criminal history or creditinformation has been used. Rather, a disparate impact case must be carefully focused on aspecific practice with an evidentiary foundation showing that it has a disparate impact because ofa prohibited factor…

[A]ny rational employer in the United States should pause to consider the implications of actions of this nature brought based upon such inadequate data. By bringingactions of this nature, the EEOC has placed many employers in the “Hobson’s choice” ofignoring criminal history and credit background, thus exposing themselves to potential liabilityfor criminal and fraudulent acts committed by employees, on the one hand, or incurring thewrath of the EEOC for having utilized information deemed fundamental by most employers.Something more, far more, than what is relied upon by the EEOC in this case must be utilized tojustify a disparate impact claim based upon criminal history and credit checks. To require less,would be to condemn the use of common sense, and this is simply not what the discriminationlaws of this country require.