April 18, 2014
The Equal Employment Opportunity Commission has once again been stymied by a federal court in its efforts to limit employers' use of background checks to protect their customers and employees. In a case involving credit checks for positions that provide access to students' financial-loan information, the Sixth Circuit Court of Appeals recently rejected the Commission's argument that the credit checks had an adverse impact on racial minorities. Significantly, the Court's decision began by noting the EEOC itself uses credit checks to screen applicants for a number of its own jobs. According to the Court decision, "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 Commission has a number of other pending cases involving both credit checks and criminal background checks that could be affected by the ruling.