Many employers, including the EEOC, use criminal background checks as part of their hiring processes.  These checks are a common sense step for employers to ensure that they are not hiring violent offenders in safety-sensitive positions, thieves where money or valuables or concerned, or otherwise expose themselves or the public to employees convicted of dangerous crimes.  Indeed, over the past 20 years courts have recognized negligent hire or retention claims where individuals with criminal records have injured customers or third parties.

While courts have long recognized disparate impact claims when a policy, including the use of criminal background checks, has a disparate impact on a particular racial group, the EEOC has tried to expand such claims to far more severe restrictions on an employer’s ability to consider a criminal background in making employment decisions.  Our sister blog, reviewed the EEOC’s initiatives in this area on July 15.

On August 9, 2013, the EEOC suffered a serious setback on its new initiative to challenge these policies.  In EEOC v. Freeman, Case No. RWT 09cv2573 (D. Md. Aug. 9, 2013), the EEOC brought a putative class action against the provider of event services for expositions, conventions, and other events.  It claimed that the employer’s use of criminal and credit background checks discriminated against African Americans, and supported its claims with expert reports.

The defendant moved to strike the experts’ reports and also for summary judgment.  The district court, in a scathing opinion, rejected the experts’ conclusions and also granted summary judgment for the defendant.  In its 40-page opinion, the court, among other things, criticized:

– the experts’ sloppy analysis, including the inexplicable use of samples when comprehensive data was available, the use of a time period that was different from that claimed in the complaint, and errors in data compilation.

– the “cherry picking” of alleged discriminatory examples to skew the data, describing the practice as “an egregious example of scientific dishonesty”.

– the EEOC’s use of the wrong pool to compare the applicant hire rate, and inclusion of criteria the defendant didn’t even use.

The court described the case as “a theory in search of facts to support it.”  Further, it went on to comment negatively on the EEOC’s decision even to bring the litigation.

Indeed, any rational employer in the United States should pause to consider the implications of actions of this nature brought based upon such inadequate data. By bringing actions of this nature, the EEOC has placed many employers in the “Hobson’s choice” of ignoring criminal history and credit background, thus exposing themselves to potential liability for criminal and fraudulent acts committed by employees, on the one hand, or incurring the wrath 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 to justify 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 discrimination laws of this country require.

The court’s careful analysis and common sense are refreshing, and opinions such as these will hopefully deter plaintiffs and the EEOC from bringing broad-based disparate impact attacks on background check policies.

The Bottom Line:  The EEOC’s attack on criminal background checks has taken a hit, but employers can only take cold comfort from the fact that they may prevail after expensive expert discovery.