In April 2012, the Equal Employment Opportunity Commission (EEOC) issued its updated enforcement guidance concerning how, in its view, Title VII of the Civil Rights Act of 1964 (Title VII) restricts an employer's discretion to consider criminal records relative to employment decisions. The EEOC was scheduled to release at the same time its updated guidance concerning the use of credit history information, but at the last minute decided (without explanation) not to do so. Even before April 2012, however, the EEOC filed lawsuits against a handful of employers, including Kaplan Higher Education Corporation (Kaplan), for allegedly violating Title VII by relying on criminal and credit records.

On January 28, 2013, the district court judge in EEOC v. Kaplan Higher Education Corp. granted Kaplan's motion to dismiss the case without a trial, holding the EEOC failed to meet its threshold burden as the plaintiff to prove that Kaplan's screening practices disproportionately excluded protected class members (i.e., had the requisite "disparate impact"). The opinion is significant for employers because: (1) the subject of background checks remains high on the EEOC's agenda (in fact there is an ongoing case in Maryland); and (2) at least for employers who are not government contractors, the EEOC may face more hurdles than it expected in proving disparate impact. Because the court decided the matter based solely on the threshold question of disparate impact, it unfortunately did not reach other important issues, such as whether the EEOC can challenge an employer's use of credit history information when the Commission itself relies on such information in the hiring process. This uncertainty reinforces the benefit to employers of reviewing their background check and related programs.

To learn more about the decision, please continue reading Littler's ASAP, EEOC Suit Against Employer Screening Applicants Based on Credit History Information Dismissed, by Rod Fliegel, Jennifer Mora, and William Simmons.