Most employers perform some type of background screening before an applicant is hired.  In recent years, the EEOC has attacked this practice for a variety of reasons.  Background screening remains a top priority for the EEOC.  Indeed, in its Strategic Enforcement Plan for years 2013 through 2016, “eliminating barriers in recruitment and hiring” is listed as its first strategic priority and the EEOC aims to eliminate hiring practices that discriminate against racial, ethnic or religious groups, older workers, women and people with disabilities.

The EEOC has taken the position that checking for a criminal record may result in disparate impact race discrimination, because statistics show that more African Americans who apply for employment have a criminal record than other ethnic groups.  But last April, the EEOC lost one of its first cases charging that the practice of identifying an applicant’s criminal record discriminates against racial minorities.  The US District Court for the District Court of Maryland in the EEOC’s lawsuit against Freeman (a nationwide convention, exhibition and marketing events company) dismissed the claims because of a “plethora” of statistical errors in the data submitted by the EEOC and criticized the EEOC’s failure to identify a specific employment practice that allegedly had a disparate impact. But, the Court did not rule out the potential that employment practices, such as criminal background checks, could have a disparate impact.  Importantly for employers, the Court recognized the legitimate interest of the employer in avoiding suits predicated on negligent hiring and the potential of exposing itself to liability for the criminal or fraudulent activity of its employees.

Undeterred by this early loss, the EEOC labored on challenging other employer practices.  The EEOC challenged the background checks initiated by Kaplan Higher Education Corporation.  The EEOC lost this fight as well.  Kaplan had instituted its policy on background checks after discovering that some of its employees stole financial aid payments and others engaged in self-dealing by hiring relatives as vendors.  The background checks Kaplan used were “racially blind” and did not require applicants to provide information about their race or other personal information.  Embarrassing for the EEOC, the Kaplan background checks were similar to that conducted by the EEOC itself.  And the EEOC used the same statistical expert that it offered in the Freeman case and the Kaplan Court refused to admit this evidence finding it lacked credibility.

When Suits Against Employers Failed, the EEOC Targets Companies Performing the Checks

On September 30, 2014, the EEOC and the Cole Group, a company performing background screening, reached an agreement where the vendor promised to revise its screening policies to ensure compliance with the Americans With Disabilities Act (ADA) and the Genetic Nondiscrimination Act (GINA).  According to the EEOC’s press release, the protective policies implemented will ensure that an applicant’s workers compensation claims, medical history, and any civil rights or personal injury claims are not inquired into and will not be disseminated to the employer.  The vendor was also required to provide employee training to ensure the new policies were followed.