EEOC efforts to crack down on employers’ use of credit and criminal checks suffered a serious setback on Feb. 20 when the 4th Circuit Court of Appeals upheld a lower court ruling that exonerated an employer of illegally running discriminatoryon job applicants.
The EEOC has aggressively filed lawsuits alleging bias when employers use the checks to weed out job applicants. The basis for the suits: Research by EEOC statistician Kevin Murphy claiming to show thatin particular have a disparate impact on minority applicants.
But the 4th Circuit’s scathing opinion in EEOC v. Freeman (No. 13-2365, 4th Circuit, 2015) noted an “alarming number of errors and analytical fallacies in Murphy’s reports, making it impossible to rely on any of his conclusions.” The court found the research was based on incomplete data, selective use of the data that was studied and “errors and unexplained discrepancies” in the database used to run the numbers.
“The EEOC claims the errors were present in the original data,” the 4th Circuit said. “It was in fact Murphy who introduced these errors into his own analysis.”
“The sheer number of mistakes and omissions in Murphy’s analysis renders it ‘outside the range where experts might reasonably differ,’” the 4th Circuit said. Without statistical proof of disparate impact, the EEOC had no case.
Since 2001, convention-services company Freeman has run criminal background checks on all applicants receiving a conditional job offer. In all cases, applicants authorized the background checks.
In 2008, an unsuccessful applicant complained to the EEOC that his job offer was illegally with-drawn because of a racially discrim-inatory. The EEOC sued on the man’s behalf.
Note: This decision doesn’t grant carte blanche to run credit and criminal background checks without regard to the threat of a lawsuit. It’s a continually evolving legal gray area, so it’s best to consult your attorney.