“Give Me Some Credit!” Maybe that’s how the EEOC feels these days, after its high-profile suit against Kaplan Higher Education Corp. was dismissed on January 28, 2013. As readers may remember, the EEOC sued Kaplan in 2010, alleging that its pre-employment credit check policies had a disparate impact upon Black job applicants.
In a 23-page opinion, the U.S. District Court for the Northern District of Ohio dismissed the suit on Kaplan’s Motion for Summary Judgment. The Court first excluded the expert witness testimony offered by the EEOC, holding that it was scientifically unsound. Expert witness testimony is key in disparate impact cases, because they rise and fall on the percentage of job applicants from a given classification as compared to the percentage of hires in the same classification. Among the key problems for the EEOC was that Kaplan, like many employers, does not collect demographic information on the race of job applicants. As a result, EEOC struggled to identify the races of those applicants that were rejected due to credit problems. In an effort to remedy the problem, the EEOC subpoenaed records from state DMVs, and used a team of “race raters” to review the DMV photos and assign races to the job applicants. The Court, not surprisingly, rejected this approach and the resulting expert witness analysis.
Next the Court addressed Kaplan’s Motion for Summary Judgment. In the absence of any statistical evidence demonstrating an adverse impact caused by the use of credit checks, the Court held that the EEOC’s case had to be dismissed.