EEOC LOSES APPEAL IN KAPLAN CASE

I reported on district court ruling EEOC v. Kaplan Higher Learning in an Alert dated 3/21/13, in which Judge Patricia A. Gaughan of the District Court for the Northern District of Ohio, Eastern Division awarded summary judgment to Kaplan on EEOC’s claim that its use of credit reports adversely impacted black applicants [2013 U.S. Dist. LEXIS 11722].  Kaplan argued that there were two major flaws in the analyses provided by EEOC’s expert: (1) no control for important variables such as the job applied for, and (2) because race information was not available for the full set of applicants, EEOC’s use of “race raters” to determine race from applicants’ driver’s license photos was unreliable.  It was the latter more so than the former that led Judge Gaughan to throw out the EEOC’s expert report in a Daubert challenge, a ruling affirmed by the 6th Circuit on 4/9/14 [2014 U.S. App. LEXIS 6490].

The 6th Circuit ruling (by Judge Kethledge) is short and rather damning.  Judge Kethledge minced no words.  He started out basically indicting the EEOC for using the same practice it’s suing Kaplan for.  Accordingly:

In this case the EEOC sued the defendants for using the same type of background check that the EEOC itself uses. The EEOC's personnel handbook recites that "[o]verdue just debts increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations." Because of that concern, the EEOC runs credit checks on applicants for 84 of the agency's 97 positions. The defendants (collectively, "Kaplan") have the same concern; and thus Kaplan runs credit checks on applicants for positions that provide access to students' financial-loan information, among other positions. For that practice, the EEOC sued Kaplan.

And he concludes with a rather terse assessment of the appeal.  Accordingly:

We need not belabor the issue further. The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself.

This ruling comes on top of another summary judgment loss on background checks in  EEOC v. Freeman (see Alert dated 3/314).  That case is now on appeal at the 4th Circuit and we will keep you posted on the ruling when it comes out.

 

By Art Gutman Ph.D, Professor, Florida Institute of Technology

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