Tag Archives: Equal Employment Opportunity Commission

February 23, 2016

EEOC Providing Employer Position Statements To Charging Parties

No reciprocity exists in the new nationwide procedure announced by the U.S. Equal Employment Opportunity Commission (EEOC) late last week. The EEOC now will provide employer position statements and any non-confidential attachments to a charging party during an investigation upon request. It then will permit the charging party to submit a response within 20 days. However, the EEOC will not afford employers the right to receive a copy of the charging party’s response.

As you may know, after an employee or other aggrieved individual files a charge with the EEOC, the agency begins an investigation of the allegations. As part of the investigation, the EEOC will request that the employer (the respondent) submit a position statement, responding to the allegations and providing supporting documentation of its employment decisions that allegedly affected the charging party.

Some EEOC regional offices already release employer position statements to the charging party and allow the charging party to file a response. For employers in those EEOC districts, there is little change in procedure. According to the EEOC, however, this new nationwide procedure is intended to provide a consistent approach in all of its offices.

Take note – these procedures apply to position statements you already may be drafting, or have recently submitted, as they apply to all EEOC requests for position statements made to respondents on or after January 1, 2016.

EEOC Providing Only The First Formal Document From Each Side

In justifying its policy to provide the employer’s position statement to the charging party, but not providing the charging party’s response to the employer, the EEOC states that it is releasing the first formal document received from each party. The respondent receives the Charge and the charging party may receive the respondent’s position statement. The EEOC does not intend to release other documents during the investigation process.

Does this amount to a one-sided discovery request? In other words, by requesting copies of what the respondent submitted to the EEOC, does the charging party get the unreciprocated right to learn the identification of witnesses, decision-makers, applicable company policies, internal documentation of the employment decision, and other important information? The EEOC states this new process is intended to help accelerate the investigation and allow it to better tailor its requests for additional information. But, employer respondents will likely see the procedure as requiring it to lay its cards on the table while permitting the charging party to keep its cards largely hidden.

Use Care With Confidential Information

Respondents who rely on confidential information in their position statements should use care in segregating that information in separate attachments that are labeled “Confidential” or some similar designation. Examples of “confidential” information include birth dates, confidential commercial or financial information, trade secrets, non-relevant personally identifiable information of witnesses, comparators or third parties, references to charges filed against the respondent by other charging parties, and sensitive medical information of others (not the charging party). The EEOC states, however, that it will not accept blanket or unsupported assertions of confidentiality, so be prepared to justify why particular information must be protected.

Be careful, too, when submitting position statements and attachments through the EEOC’s online portal. Once you click “Save Upload” to submit your position statement and any attachments, you will not be able to retract them.

Will The New Procedure Change Outcomes?

It’s important to ask whether the early release of the respondent’s position statement (with supporting documents) to the charging party during the EEOC’s investigation will change the outcome of charges. As with any case, it largely depends on the facts. If you have bad facts or poor documentation on your side, the charge may result in a probable cause finding. Or, the charging party may hold out for more during settlement talks or mediation. However, if you have good policies in place, enforce them uniformly, and document your decisions properly, the release of your defense may help resolve the matter earlier in the process, short of litigation.

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April 16, 2014

EEOC Loses Kaplan Credit Check Appeal

By Brad Cave

In 2010, the Equal Employment Opportunity Commission (EEOC) sued Kaplan Higher Education Corporation, claiming that Kaplan’s use of credit reports had a disparate impact on black applicants. The trial court threw out the EEOC’s suit because it used an invalid method for determining the race of Kaplan’s applicants. The EEOC appealed, and lost again. In a stinging opinion, the Sixth Circuit Court of Appeals agreed with Kaplan and rejected the methodology promoted by the EEOC’s expert witness. The Sixth Circuit’s opinion dooms the agency’s background check disparate impact lawsuit against Kaplan and slaps the EEOC for suing a private employer “for using the same type of background check that the EEOC itself uses.” The ruling also illustrates the EEOC’s failure to show that an employer’s use of neutral background checks results in a disparate impact on African-American applicants. EEOC v. Kaplan Higher Educ. Corp., No. 13-3408 (6th Cir. April 9, 2014).

Credit Checks Aimed At Preventing Employee Abuses

Kaplan is a for-profit test preparation and higher education provider. Because some Kaplan students receive financial aid, some Kaplan employees have access to students’ financial information, including information that is subject to the U.S. Department of Education confidentiality regulations. Years ago, Kaplan discovered that some of its financial-aid officers had stolen aid payments and some executives had engaged in self-dealing by hiring relatives as vendors for the company. To help stop these abuses, Kaplan began conducting credit checks on applicants for senior-executive positions as well as accounting, financial aid and other positions where employees have access to company or student financial information. Neither Kaplan nor its credit check vendor provided or linked the applicant’s race with the applicant’s credit report.

EEOC Alleges Kaplan’s Credit Checks Screen Out More African-Americans

Consistent with its efforts to target employers who use background check policies to screen applicants, the EEOC sued Kaplan alleging that Kaplan’s use of credit checks resulted in more African-Americans being rejected than whites, creating a disparate impact in violation of Title VII. To support its claim, the EEOC hired industrial and organizational psychologist Kevin Murphy to analyze Kaplan’s credit check data and offer an expert opinion based on the statistics. However, because the credit check information did not include the applicant’s race, Murphy and his team needed another method to determine race. They created a process that the EEOC called “race rating” in which a team of five “race raters” reviewed drivers’ license photos for a portion of the applicants to visually identify their race. Despite having credit information for 4,670 applicants, Murphy based his “expert” analysis on only 1,090 applicants, of whom 803 had been racially classified using Murphy’s “race rating” process.

“Homemade Methodology” Rejected by Court

The Sixth Circuit wholeheartedly rejected Murphy’s “race rating” process, stating that “[t]he 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 Court upheld the exclusion of Murphy’s testimony not only due to his faulty methodology, but also because the group of 1,090 applicants in Murphy’s statistical analysis was not representative of the applicant pool as a whole. Of Kaplan’s entire pool of 4,670 applicants, only 13.3% of the applicants were rejected on the basis of credit checks, but Murphy’s smaller pool of applicants had a fail rate of 23.8%. The Court found that Murphy’s unrepresentative sample might not equate to the respective fail rates of black versus white applicants and therefore, was an unreliable method for the EEOC to show disparate impact.

EEOC’s Own Background Check Policy Contradicts Its Attack on Private Employers For Use of Credit Checks

Although not central to the exclusion of the EEOC’s expert, the Court put the EEOC’s own background check policy front and center. Through the discovery process, Kaplan had successfully obtained information on the EEOC’s background check policies and pointed to the agency’s personnel handbook which states “[o]verdue just debts increase temptation to commit illegal or unethical acts as a means of gaining funds to meet financial obligations.” To address those potential concerns, the EEOC runs credit checks for 84 of the 97 positions within the agency. The Court highlighted the disconnect between the EEOC attacking Kaplan for a credit check policy that the agency used itself.

Future EEOC Challenges to Employer Use of Credit Checks

The Kaplan decision is the latest in a string of EEOC losses in class actions alleging disparate impact based on an employer’s use of a neutral background check process. The EEOC seems unable to provide evidence to support a finding that African-Americans, Hispanics or other groups are being rejected for employment at higher rates than whites based on background checks. In addition, the EEOC’s own use of credit checks in hiring will be used against it in any future similar lawsuits. Although it remains to be seen whether the EEOC will back off of its systemic enforcement efforts related to the use of background checks, the trend for employers is positive.

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July 29, 2013

The Battle Over Background Checks Continues — State AGs Accuse EEOC of “Gross Federal Overreach”

By Mark Wiletsky

Is it discriminatory if an employer does not hire anyone with a particular criminal conviction, regardless of that person’s race, gender, religion, or other protected characteristic? According to the EEOC’s April 2012 Enforcement Guidance, it might be. But in a July 24, 2013 letter sent to EEOC Commissioner Jacqueline Berrien and the four EEOC Board Members, nine state Attorneys’ General (AGs) disagree. The AGs chastise the EEOC for filing recent lawsuits against BMW Manufacturing Co., LLC and Dolgencorp (Dollar General), in which the EEOC alleges that these employers violated Title VII’s disparate impact prohibition by using a bright-line screening policy that rejected all individuals with past convictions in certain categories of crimes, such as murder, assault, reckless driving and possession of drug paraphernalia.

The letter then criticizes the EEOC’s April 2012 Enforcement Guidance on Arrest and Conviction Records, stating that the EEOC’s policy guidance incorrectly applies the law and constitutes an unlawful expansion of Title VII. The AGs argue that if Congress wishes to protect former criminals from employment discrimination, it can amend the law, but it is not the EEOC’s role to expand the protections of Title VII under the guise of preventing racial discrimination.

The Republican state AGs from Colorado, Montana, Utah, Kansas, Nebraska, West Virginia, Alabama, South Carolina and Georgia joined in this missive to say “enough is enough” on the EEOC’s background check lawsuits. Citing the burden on businesses to undertake more individualized assessments of an applicant’s criminal history, the AGs urge the EEOC to rescind its April 2012 Enforcement Guidance and dismiss the lawsuits against Dollar General and BMW. Not likely, but it may get the attention of federal lawmakers who may try to rein in the EEOC’s position on this issue.

Disclaimer:This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.