Employers Get Another Victory Litigating Use of Background Checks in the Hiring Process

Posted by Jeanine Gagliardi on Wed, 05/07/2014 - 04:00

The EEOC’s aggression toward employers that use background checks in the hiring process has resulted in a lot of litigation against businesses. We recently posted about a big win for employers in the federal trial court in Maryland. The EEOC’s appeal of that decision is still pending.

In the meantime, the U.S. Court of Appeals for the Sixth Circuit issued an opinion in another case concerning the same issue. Some experts believe that the new Sixth Circuit opinion foreshadows what will happen in the appeal of the Maryland case.

In the Sixth Circuit case, the EEOC sued an employer, claiming that the employer’s use of credit histories in the hiring process disparately impacted African-American applicants. The trial court summarily rejected the EEOC’s claim because the EEOC failed to present reliable, expert opinion regarding the disparate impact. The EEOC appealed.

Like Judge Titus in the Maryland opinion, the Sixth Circuit court:

(1) recognized that the employer used credit histories for the facially neutral purpose of avoiding untrustworthy employees, and

(2) noted that the EEOC looks at the credit history of most of its own job applicants.

Agreeing that the EEOC failed to present reliable evidence of a disparate impact, the appellate court affirmed judgment for the employer.

The Sixth Circuit court’s decision does not guarantee a win for employers in the Maryland appeal, but it does reaffirm that, to succeed, the EEOC must present real proof of a disparate impact. If the EEOC continues to fail to find such proof, it may begin to take a more practical approach that permits employers to use background checks for legitimate purposes without fear of being sued.

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