The Equal Employment Opportunity Commission was dealt a huge blow with the dismissal of its claim against Kaplan Higher Education Corp. The EEOC alleged that Kaplan violated Title VII of the 1964 Civil Rights Act by considering applicants’ credit history in making an employment decision. The decision handed down by the U.S. Courts of Appeals for the Sixth Circuit stated that the EEOC failed to show that a racially disparate impact was present when Kaplan made their hiring decisions. The court of appeals excluded expert testimony on behalf of the EEOC because the methods used didn’t satisfy the standards set by Daubert v. Merrell Dow Pharmaceuticals Inc., 509 US 579 (1993) for admissibility of expert opinions.
This decision could potentially impact other EEOC lawsuits challenging how employers used credit and criminal history screening reports. The Sixth Circuit ruling continues a trend of losses for the EEOC in its efforts to bring lawsuits against companies who potentially discriminate against African-American and Hispanic applicants as well as males with previous criminal records. The recent dismissed EEOC cases of Kaplan and Freeman show “how unimpressed” the federal courts are with the EEOC’s efforts to bring systemic lawsuits against employers for their use of background screening reports.