A federal appeals court judge ruled against the Equal Employment Opportunity Commission, saying the agency was hypocritical in its lawsuit against a test prep company.
“In this case the EEOC sued the defendants for using the same type of background check that the EEOC itself uses,” wrote Raymond Kethledge, a 6th circuit court of appeals judge.
Kethledge joined two other judges who voted unanimously against the EEOC, which was appealing a ruling from a district court.
The EEOC had alleged that Kaplan Higher Education Corp. engaged in disparate impact by using credit checks in the job application process. Those credit checks, the EEOC contended, unfairly screened out black applicants.
But the appeals court found issue with the methods used by the agency to analyze Kaplan’s hiring decisions.
The EEOC hired Kevin Murphy to conduct the statistical analysis. Murphy’s methodology, which he developed “specifically for purposes of litigation,” was “not a reliable means to demonstrate disparate impact,” Kethledge wrote.
Murphy used five “race raters” to scour through pictures of job applicants on applications screened by one of Kaplan’s third-party hiring vendors.
“We need not belabor the issue further. 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.”
Kethledge pointed to the EEOC’s personnel handbook as evidence that the agency itself finds value in credit checks. The handbook “recites that “[o]verdue just debts increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations.”
“[T]he EEOC runs credit checks on applications for 84 of the agency’s 97 positions,” wrote Kethledge in Wednesday’s court opinion.
After a string cases where Kaplan executives and other administrative staff had stolen funds from students, Kaplan instituted a series of job screening measures, including credit checks on executives, accountants, and other staff members who deal with student finances.
The rebuke of the EEOC for its use of a process which it employs comes on the heels of another complaint filed by another federal agency.
Last week, the House Financial Services Oversight and Investigations subcommittee held a hearing looking into job evaluation scores given to employees at the Consumer Federal Protection Bureau. That agency is tasked with rooting out discrimination against borrowers. But an investigation had found that the CFPB gave its white employees much higher job evaluation scores than its black and Hispanic staff.
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