Appeals court rules for common sense

Published on Thursday, 24 April 2014 22:59 - Written by

A U.S. appeals court has handed a victory to common sense. The Sixth Circuit Court of Appeals has ruled that the Equal Employment Opportunity Commission has no grounds to appeal the dismissal of one of its claims that employers shouldn’t do criminal background and credit checks on prospective employees.

“The EEOC sued Kaplan, an organization that offers undergraduate and graduate degrees to students, under Title VII of the Civil Rights Act for using the same credit-based background checks that the EEOC uses itself,” the Heritage Foundation explains. “Kaplan implemented these common-sense credit checks after discovering that some of their employees had stolen financial aid payments belonging to students and that others had engaged in self-dealing by hiring relatives as vendors. The credit checks applied to applicants who, if hired, would have access to company financials or cash, as well as student financial aid information.”

So what was the problem — according to the EEOC? The problem was “disparate impact” of such checks. The agency said that a disproportionate number of African-Americans were denied jobs.

No, a disproportionate number of people with criminal records or other problems were denied jobs.

“Disparate impact is a method of analysis favored by the Obama administration for identifying and suing employers who engage in discrimination, whether or not they intend to do so,” Forbes magazine explained. “Employers complain that they can be held liable for millions of dollars in damages and back wages based simply upon the statistical makeup of their work force, without any evidence they intended to discriminate.”

What’s more, the method of determining race and disparities is flawed.

“A three-judge panel of the Sixth Circuit Court of Appeals in Cincinnati agreed, saying the EEOC expert’s method for proving racial discrimination, which included hiring ‘race raters’ to examine drivers’ license photos of applicants to determine their race, was ‘not a reliable means to demonstrate disparate impact,’” Forbes says.

The ruling was a clear defeat for the EEOC.

“We need not belabor the issue further,” the court ruled. “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.”

The reason it’s a victory for common sense is that employers should be able to ask these questions of people they’re going to entrust with money — the company’s, and the public’s.

“The federal government itself conducts background checks for many positions and has blanket exclusions that prevent some individuals with criminal convictions from holding certain jobs,” Heritage points out.

So does the EEOC itself.

“Perhaps the EEOC should look in the mirror and sue itself for ‘disparate impact,’” Heritage says.

It’s probable that the federal government will appeal the ruling to the U.S. Supreme Court. If the appeals court ruling stands, a lot of other EEOC cases could fall apart.

But for now, we can enjoy this rare victory for common sense.