EEOC Whacked Again on Background Checks

Ct Rejects Race Discrimination Initiative

Another court has rejected the U.S. Equal Employment Opportunity Commission’s initiative to combat race discrimination by limiting the use of criminal background checks in hiring.

The U.S. Court of Appeals for the Sixth Circuit in Michigan this week upheld a lower court ruling requiring the EEOC to pay $751,942.48 in fees and costs to Peoplemark, a temporary-employment agency with offices in Michigan, Tennessee, Kentucky and Florida.

The award includes $526,172 in fees to Peoplemark’s in-house expert, an amount the EEOC  called astounding, inappropriate and poorly documented.

 EEOC Director Jacqueline Berrien recently maintained that the EEOC does not challenge an employers’ decision to conduct criminal background checks but instead challenges screening processes that are not job related and consistent with business necessity and which have a disproportionate impact on African-Americans.

The EEOC filed a complaint in 2008 alleging that Peoplemark had a blanket policy of denying employment opportunities to persons with felony records and that this policy had a disparate impact on African Americans.

Obvious?

Initially, it appeared obvious that Peoplemark had a policy of denying employment to applicants with felony records. Peoplemark used  an application form that asked applicants if they have a felony record and conducted independent investigations into the criminal records of all applicants. Most importantly, Peoplemark’s Associate General Counsel Judd F. Olsten actually admitted to the EEOC that Peoplemark had a company-wide policy of rejecting felon applicants

Peoplemark did not did not deny the existence of a company-wide policy against hiring felons until July 2009 – almost two years after the EEOC began investigating and a year after the  EEOC’ filed its complaint.

The appeals court notes that Peoplemark had  turned over 178,888 discovery documents to the EEOC by Oct. 1, 2010 which showed that Peoplemark had referred felons to job opportunities.  The fee award  dates October 2010.

According to the appeals court: “When discovery clearly indicated (Peoplemark’s Chief Counsel’s) statements belied the facts, the Commission should have reassessed its claim.”

The appeals court also noted the EEOC identified a class of 286 individuals that included applicants that did not have felony convictions and applicants who obtained employment through Peoplemark despite their criminal records.

The EEOC and Peoplemark agreed by joint motion to dismiss the case in March, 2010, with Peoplemark held to he prevailing party for fee purposes.  The EEOC argued it could have filed an amended complaint stating a valid claim against e at that time, an argument the court found to be irrelevant.

The award includes  $219,350.70 in attorney’s fees, $526,172 in expert witness fees (for 123.55 hours of work) and $6,419 in other expenses.

The case involved a complaint by Sherri Scott, an African-American with a felony conviction, submitted an application and was not referred for employment.  She filed a discrimination complaint under Title VII of the Civil Rights Act and the EEOC began an investigation.

In August, Judge Roger Titus of the U.S. District Court for the District of Maryland dismissed a lawsuit brought by the EEOC in 2009 against Freeman, Inc., a service provider for corporate events, which alleged Freeman unlawfully relied upon credit and criminal background checks that caused a disparate impact against African-American, Hispanic, and male job applicants.

The Attorney Generals  of West Virginia, Colorado, Alabama, Georgia, Kansas, Nebraska, Montana, South Carolina and Utah have complained about the EEOC background check policy.

The EEOC last summer filed lawsuits against BMW and Dollar General Store for refusing to hire individuals with felony records. In the Dollar Store case, the individual was incorrectly reported as having a felony record when she did not.

The Bureau of Justice Statistics has estimated that approximately 9 percent of all men will serve time in state or federal prisons, including 28 percent of black males, 16 percent of Hispanic males, and 4 percent of white males.

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