EEOC LOSES APPEAL IN CASE VERSUS KAPLAN U

EEOC LOSES APPEAL IN CASE VERSUS KAPLAN U

Just a few days ago the United States Court of Appeals in Cincinnati upheld a lower court decision, which, in effect, dismissed the EEOC’s suit that claimed that Kaplan University’s use of a credit check screened out more African-American applicants for positions that provide access to student financial information.  The EEOC appealed to the US Court of Appeals for the 6th Circuit, which upheld the lower court’s summary judgment dismissing the suit.

In the proverbial nutshell, the EEOC sued Kaplan University claiming that using a credit check to screen job applicants for positions would give them access to students’ financial information.  What makes this particularly interesting is the fact that the EEOC uses the same type of background check on its applicants for employment that Kaplan was using!  Their policy states, quoting from the EEOC’s own personnel handbook,  “…[o]verdue just debts
increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations.”

One has to wonder why the EEOC would sue Kaplan for doing exactly the same type of background check they do! If a credit check done by the EEOC doesn’t create a “disparate impact” on a protected category of individuals, why would they think that such an impact would be created if Kaplan University did the same thing?

The EEOC based its case on “expert testimony” from statistical data compiled by a third party.  The lower court found the data to be unreliable and further noted that the statistical sample used to determine if the credit check was having a “disparate impact” on minorities was not representative of Kaplan’s “applicant pool as a whole.”

Even more significantly, it was noted that Kaplan used a third-party vendor to do its credit checks and that the vendor didn’t report the applicant’s race to Kaplan on any check that was done!  While the case wasn’t decided on the fact that the EEOC uses essentially the same credit checks that Kaplan uses to screen applicants for employment, the EEOC couldn’t demonstrate that the use of a credit check had any adverse impact on African-American students seeking financial assistance.

Score one for the logic behind doing a credit check as part of the hiring process for jobs that will give candidates access to company financial records or cash!