Federal judge slams EEOC, dismisses discrimination complaint

‘To require less, would be to condemn the use of common sense, and this is simply not what the discrimination laws of this country require’
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eeocBALTIMORE – On Aug. 9, U.S. District Judge Roger W. Titus, for the District of Maryland, granted Freeman’s motion for summary judgment and dismissed the discrimination complaint filed by the Equal Employment Opportunity Commission (EEOC) against Freeman.

An employee-owned company, Freeman, which employs over 3,500 full-time and 25,000 part-time and seasonal workers in offices throughout the United States, is considered the leading global partner for integrated experiential marketing solutions.

Headquartered in Dallas, with more than 70 offices in North America and the UK, Freeman provides integrated services for expositions, conventions, corporate events, meetings and exhibit programs with annual revenues exceeding $1.3 billion.

In 2009, the EEOC filed a nationwide hiring discrimination lawsuit against Freeman, claiming Freeman’s policy of performing criminal background checks and obtaining credit histories to make hiring decisions had a disparate impact on African-American, Hispanic and male applicants.

Titus, a President George W. Bush nominee, stated the case against Freeman was only one of a series of actions recently brought by the EEOC against employers who rely on criminal background and/or credit history checks in making hiring decisions.

Citing two recent complaints filed by the EEOC against Dollar General Corp. and car manufacturer BMW, Titus stated “the EEOC claimed those employers improperly used criminal background checks to bar potential employees, resulting in a disparate impact on African-American applicants.

Titus states, “Because of the higher 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.”

While the EEOC would like employers to fear the use of any criminal history information would be in violation of Title VII of the Civil Rights Act of 1964, Titus stated, “[T]his is simply not the case,” adding, “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.

Freeman pointed out in its briefs that even the EEOC conducts criminal background checks on approximately 90 percent of its positions.

Although some specific uses of criminal and credit background checks may be discriminatory and violate the provision of Title VII, Titus stated the EEOC failed to meet its burden of proof demonstrating a disparate impact stemming from a specific employment practice.

Depending upon the type of position applied for, Freeman utilized a variety of background checks. For general employees that did not hold credit sensitive jobs, only a criminal history investigation and Social Security verification were performed.

The court stated the EEOC’s expert statistical testimony (Murphy) appeared to contain “such a plethora of errors and analytical fallacies” underlying the conclusions to render the database and reports completely unreliable and insufficient to support a finding of disparate impact.

In Murphy’s original report, he admitted access to 58,892 applicants through discovery. However, his ultimate testing database included fewer than 2,014 unique applicants and included numerous duplications.

In granting Freeman’s motion for summary judgment, Titus concluded the EEOC’s action was that of a theory in search of facts to support it and stated, “But there are simply no facts here to support a theory of disparate impact resulting from any identified, specific practice of the defendant.”

Titus said, “Indeed, any rational employer in the United States should pause to consider the implications of actions of this nature brought based upon such inadequate data. 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.

Something more, far more, than what is relied upon by the EEOC in this case must be utilized to justify a disparate impact claim based upon criminal history and credit checks. To require less, would be to condemn the use of common sense, and this is simply not what the discrimination laws of this country require.”

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