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Judge Hammers EEOC in Criminal Background Check Lawsuit

Posted on 09/01/2015

by Russ Rosenberg. Original by Tim Gould. Reprinted with permission from Tim Gould at

You think you were disturbed over the Equal Employment Opportunity Commission's crackdown on the use of background checks in hiring? Wait until you hear what a Maryland federal judge had to say. U.S. District Court Judge Roger W. Titus slammed the EEOC for bringing suit against the Freeman Companies, a national events marketing organization. The agency had alleged Freeman "rejected job applicants based on their credit history and if they have had one or more of various types of criminal charges or convictions."

The judge said the "the story of (the lawsuit) has been that of a theory in search of facts to support it." He also questioned the employment statistics provided by the agency, saying the data contained "a plethora of errors and analytical fallacies."

"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 supplying reliable expert testimony and statistical analysis that demonstrates disparate impact stemming from a specific employment practice before such a violation can be found," the judge wrote. ". . . The EEOC has failed to do so in this case."

A ‘Hobson’s choice’ for employers
Judge Titus also came down hard on the EEOC's recent focus on the use of background checks. Here's a chunk of what he had to say:

For many employers, conducting a criminal history or credit record background check on a potential employee is a rational and legitimate component of a reasonable hiring process. The reasons for conducting such checks are obvious. Employers have a clear incentive to avoid hiring employees who have a proven tendency to defraud or steal from their employers, engage in workplace violence, or who otherwise appear to be untrustworthy and unreliable. … Because of the higher rate of incarceration of African-Americans than Caucasians, indiscriminate use of criminal history information might have the predictable result of excluding African-Americans at a higher rate than Caucasians. Indeed, the higher incarceration rate might cause one to fear that any use of criminal history information would be in violation of Title VII. However, this is simply not the case. Careful and appropriate use of criminal history information is an important, and in many cases essential, part of the employment process of employers throughout the United States. … Even the EEOC conducts criminal background investigations as a condition of employment for all employees, and conducts credit background checks on approximately 90% of its positions. … It is not the mere use of any criminal history or credit information generally that is a matter of concern under Title VII, but rather what specific information is used and how it is used. Because of this, it is simply not enough to demonstrate that criminal history or credit information has been used. Rather, a disparate impact case must be carefully focused on a specific practice with an evidentiary foundation showing that it has a disparate impact because of a prohibited factor. …

The judge noted two similar cases brought by the EEOC — one against carmaker BMW and the
other against retail chain Dollar General Corp. 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, the judge wrote. It’ll still pay to tread carefully. What's the upshot of this decision? Here's what Eric B. Mayer had to say on The Employer Handbook blog:

Let's call a spade a spade: this is a major setback for the EEOC. However, employers must recognize that facially neutral background checks may have a disparate impact on certain protected classes. While the EEOC's individualized assessment strikes me as impracticable, I do agree with the EEOC that employers are well served to consider the nature of the position to be filled, as well as whether a background check exclusion is actually job- related and consistent with the needs of the business. Doing so helps strike a reasonable balance to protect the business, while not excluding viable candidates.



Asset Control has provided background reference check services to Portland General Electric since 2009. This service, which includes in-depth interviews with professional references, has been integral in helping us make informed, appropriate hiring decisions. Asset Control's easy-to-use website has provided us with timely updates on our applicants. With their quick and thorough research, Asset Control has helped us meet strict federal compliance standards.

- Linda Bodine, SPHR, Staffing Supervisor
Portland General Electric


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