Chalk one up for employers in the battle over the use of criminal background checks in hiring. In a recent decision issued on August 9, 2013, a federal judge took aim at the Equal Employment Opportunity Commissions’ (EEOC) recent efforts to restrict employers' use of criminal-background checks in hiring when he dismissed a lawsuit brought by the agency against a Dallas event-marketing company. EEOC v. Freeman, No. 09-CV-2573 (D. Md. Aug. 9, 2013). U.S. District Judge Roger W. Titus in Maryland said the EEOC didn't show that Freeman discriminated against applicants by using criminal-background checks or credit checks in its hiring process.
The suit stemmed from a September 2009 complaint in which the EEOC alleged that Freeman engaged in an ongoing pattern and practice of unlawful discrimination against African–American, Hispanic, and male job applicants in violation of Title VII of the Civil Rights Act by using criminal and credit histories as selection criteria for employment. More specifically, the agency claimed that the hiring requirements resulted in disparate impact on proposed class members.
Importantly, the company only ran a background check after it made an offer of employment, and it considered the results of background checks on a detailed, case-by-case basis. Thus, Freeman clearly did not employ the kind of blanket disqualification criteria that the EEOC traditionally has frowned upon. The crux of the decision was the fact that the EEOC was unable, even through its expert, to prove the existence of disparate impact. Judge Titus held that while "some specific uses of criminal and credit background checks may be discriminatory and violate the provision of Title VII, the EEOC bears the burden of applying reliable expert testimony and statistical analysis that demonstrates disparate impact stemming from a specific employment practice before such a violation can be found."
The dismissal is important as this case is part of the EEOC's larger effort to crack down on what it considers discriminatory hiring practices. Indeed, earlier this year, the EEOC approved a four year strategic enforcement plan that touted “eliminating barriers in recruitment and hiring” as one of its top priorities and has targeted class-based recruitment and hiring practices that it claims have a discriminatory impact, such as the use of criminal background checks. Notably, the strategic enforcement plan came shortly after the EEOC released new guidance in 2012 attempting to restrict the use of criminal background checks for new hires. Click here to read our previous Alert regarding the 2012 guidance.
While the dismissal is being hailed as a victory for employers, the EEOC nevertheless continues its aggressive pursuit of such disparate impact, class-based claims – bringing suits recently against BMW and Dollar General over their use of criminal background checks in their hiring and firing practices. Accordingly, employers are wise to evaluate hiring practices and use of criminal history in employment decisions as these matters are likely to come under increased scrutiny.