Court Takes EEOC to the Woodshed For Overreach on Background Checks

From the HR blog at TLNT.
From the HR blog at TLNT.

You might recall last August’s stinging comments from celebrated Judge Roger Titus of the U.S. District Court for the District of Maryland that were directed at the EEOC when he dismissed their case against Freeman Companies for what the commission alleged as discriminatory hiring practices related to Freeman’s use of criminal background checks and credit reports.

Judge Titus used words like “laughable,” “unreliable,” and “mind boggling.”

Instead of heeding the judge’s remarks and conceding their overreach, the Equal Employment Opportunity Commission appealed his ruling to the Fourth U.S. Circuit Court of Appeals, based in Richmond, VA. At issue was the testimony of the EEOC’s expert witness, Dr. Kevin R. Murphy, which was excluded by the lower court.

One judge’s unrestrained opinion

In this regard, Judge Titus was unrestrained when it came to his opinion.

He described Dr. Murphy’s research as:

  • Laughable;”
  • Based on unreliable data;”
  • Rife with analytical errors;”
  • Containing “a plethora of errors and analytical fallacies,” and a “mind-boggling number of errors;”
  • Completely unreliable;”
  • So full of material flaws that any evidence of disparate impact derived from an analysis of its contents must necessarily be disregarded;”
  • Distorted;”
  • Both over and under inclusive;”
  • Cherry-picked;
  • Worthless;” and,
  • An egregious example of scientific dishonesty.”

Last week, the Appeals Court affirmed Judge Titus’ decision. And while the ruling comes as no surprise, the blistering remarks the Fourth Circuit used in affirming the decision are as illuminating as they are instructive on how they may react to future EEOC cases.

“‘The public interest’  is jeopardized”

In concurring with the majority opinion, Judge G. Steven Agee wrote the following:

I write separately to address my concern with the EEOC’s disappointing litigation conduct. The Commission’s work of serving “the public interest” is jeopardized by the kind of missteps that occurred here.

And it troubles me that the Commission continues to proffer expert testimony from a witness whose work has been roundly rejected in our sister circuits for similar deficiencies to those we observe here [note that Murphy’s data was roundly rejected in EEOC v. Kaplan]. It is my hope that the agency will reconsider pursuing a course that does not serve it or the public interest well.“

You can read the full opinion from the Fourth U.S. Circuit Court of Appeals here.

“The EEOC owes duties to employers as well”

Judge Agee also cautions the EEOC with the following concluding remarks:

The EEOC wields significant power, some of which stems from the agency’s broad discretion to investigate, conciliate, and enforce, and some of which derives from public actions that exert influence outside the courtroom. The Commission’s actions can be also expected to have broader consequences than those of an ordinary litigant given the “vast disparity of resources between the government and private litigants.” (EEOC v. Great Steaks, Inc.).

In deciding when to act, the Commission must balance sometimes-competing responsibilities. On the one hand, the agency must serve the employee’s interest by preventing an employer from “engaging in any unlawful employment practice” under Title VII. 42 U.S.C. § 2000e-5(a). On the other hand, “the EEOC owes duties to employers as well: a duty reasonably to investigate charges, a duty to conciliate in good faith, and a duty to cease enforcement attempts after learning that an action lacks merit.”( EEOC v. Argo Distrib.). That the EEOC failed in the exercise of this second duty in the case now before us would be restating the obvious.

The EEOC must be constantly vigilant that it does not abuse the power conferred upon it by Congress, as its “significant resources, authority, and discretion” will affect all “those outside parties they investigate or sue.” (EEOC v. Propak Logistics, Inc.). Government “has a more unfettered hand over those it either serves or investigates, and it is thus incumbent upon public officials, high and petty, to maintain some appreciation for the extent of the burden that their actions may impose.”  The Commission’s conduct in this case suggests that its exercise of vigilance has been lacking. It would serve the agency well in the future to reconsider how it might better discharge the responsibilities delegated to it or face the consequences for failing to do so.”

How’s that for a beat down?

In the end, who won?

It would appear that Freeman Companies has finally won after seven years of litigation, right?

Yes, they’ve prevailed in court, but how many millions of dollars did they spend defending themselves? How many hours did it take to prepare discovery, take depositions, testify in court, etc. to defend their lawful employment background screening practices? Indeed, a hollow victory.

It seems to me that everyone has lost here (maybe with the exception of Akin Gump, the law firm that expertly defended Freeman). The EEOC certainly lost in court. One would think that Dr. Kevin Murphy will no longer be collecting a paycheck as an expert witness for the EEOC (or will he?).

Freeman is out millions of dollars. And, oh yeah, so are the American people who bankrolled EEOC’s case.

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Time to moderate

It bears repeating that I am not anti-EEOC. They absolutely serve an admirable purpose in our society. My concern is that they have been operating outside the lines for some time now with no check on their authority.

And once again, no one wins when that happens.

It is time for them to rethink their position on employee background checks and aggressive litigation tactics where it’s okay to ignore facts that don’t fit their narrative.

There is a responsible middle ground here that doesn’t sacrifice public safety, preclude employers from exercising proper due diligence or risk discriminating against protected class populations.

I don’t have all of the answers, but let’s start by disallowing arrest records that don’t result in convictions. Perhaps a national and uniform ban the box provision which (only) precludes employers from asking a candidate if they’ve been convicted of a crime on a job application.

Oh, and for good measure, let’s ask the EEOC to adhere to the same background screening guidance they impose on employers.

I think Judges Titus and Agee would be more amenable to EEOC’s arguments under these circumstances.

This was originally published on the EmployeeScreen IQ blog


30 Comments on “Court Takes EEOC to the Woodshed For Overreach on Background Checks

  1. Sounds like the EEOC should pickup the tab when it looses cases and have an impact on there government budget. This would get there attention or close them down.

    1. Problem is, it’s actually the taxpayer picking up the tab.
      The pinheads at EEOC have no real skin in the game and will never change.

      1. True, but if there budget is reduced per the payout it does add a little skin in the issue. A bi-yearly audit of there SOP would also shake them up instead of “I am the government so you cannot touch me” attitude.

  2. I agree with the position that the EEOC should pay all court costs for both sides, but that is “us”. How about docking the pay of the top 10% of EEOC employees when they make these egregious mistakes of overreach.

    1. They should have to pay all the costs. Let them buy “insurance” to cover their costs for illegal or unfair prosecutions. The taxpayer should not be punished again by having to pick up any portion of the tab.

    2. It may have been an egregious overreach, but you can bet your bottom dollar that it was not a mistake or unintended. These are control freaks with Populist Leftist-Progressive Agendas who are on a power trip and do not recognize or acknowledge any lawful limitations on their power.

    3. How about firing the top executives in the EEOC and use that money to pay legal fees? This entire Administration is filled with overreaching Organizations!
      From the Justice Dept. to the IRS to the President himself, they ignore the written laws, legally passed by the Congress, and do whatever feels good to them! We need a Government of, by and for the People, not one of, by and for the political interests of left-wing Progressive politicians!

  3. Yes the EEOC needs to pay Freeman, but not with taxpayer money, it should come out of the paychecks of the people who are in charge and let this go for so long, they should have seen this as what it was, a farce, there are lots of companies that hire on condition of have either background check or credit check, or both! I think this is another department like Homeland, we don’t need them anymore, Congress needs to take their funding away, close shop on both!

  4. That is the problem with a government this too large and too powerful. When the government can financially break you, that is not right. The lawyers for Freeman need to be paid out of the EEOC budget.

    1. Maybe that would work. But the taxpayers should not be injured again to pay for the loss by an out of control EEOC.

  5. The EEOC has been running wild for a while now. It is good to see that they are being held accountable (well, if they paid up that would even be better).
    I have some knowledge of the inner workings of the EEOC. Unfortunately, what has happened over the years is this: Two types of people go to work for the EEOC. One is the type who really and truly cares about justice and equality. They get it. The other is the person who just wants a govt job. What ends up happening is that the people who genuinely care about the issues get frustrated with the inner workngs of the organization and leave, leaving only those people behind who don’t care and don’t get it. There are exceptions… But they are just that: exceptions.
    This isn’t the way America is supposed to work.

  6. Fire the bastiges and let it be a reminder that bad decisions have consequences.
    That’s the way the rest of us live!!!

  7. No surprise. INCOMPETENCE has been a hallmark of ‘the best and brightest’ in the current administration. You might even say IT FLOWS FROM THE TOP, DOWN.

    See DOJ, ATF, IRS, EPA……………………………….

  8. The only winner in this case is the lawyers! They walked away with all of the MONEY! The people in the EEOC who are responsible for this destructive and unconstitutional litigation should be held PERSONALLY responsible for the pecuniary damage they have wrought on the Freemen Companies! It is time that rogue elements and individuals in the government be estopped from punishing people and companies who are completely within their rights by bringing spurious criminal and civil charges against them! It is time that those rogue elements are brought to the understanding that such actions on their part will bring personal liability to them!

  9. The EEOC is a bully group. They go after smallbusinesess becuase they do not have the financial means to defend themselves for false claims.

  10. Have any of you ever considered that, with rare exceptions, credit reports serve no legitimate purpose in an employment scenario? Their typical purpose IS to act as a straw man for other, obviously illegal, factors such as race. That’s why defendant Freeman dropped them on their own accord two years before any of this happened. (Read the appellate decision). The real issue was the methodologies used by EEOC’s “expert”, not whether their allegations were right or wrong. In an era where the use of so-called “credit reports” are being marketed as a panacea replacing real pre-hiring investigation, this decision sends the wrong message.

    1. Credit reports only show whether or not people are responsible. I cannot see why employers would need that information.

    2. Given that many Democrat run cities and states have and are trying to remove actual Background Checks on potential employees other means of culling through the massive numbers of applicants needed to be found and used. While I don’t generally approve of the use of credit reports there are certain types of jobs where such information is relevant esp. in the financial and banking sectors.

  11. It comes as No surprise that the EEOC would waste Taxpayer dollars on a fruitless and meritless investigation (which began under Bush – the investigation part that is) and then proceed with Falsified evidence and the testimony of a phoney expert. Afterall they are just mimicking their Boss in the White House, at the DOJ and the Democrap Party in general. (the Prosecution of this meritless case occurred completely under the Obama Administration with His appointees running the EEOC.

  12. Well if its any consolation, the head of the EEOC will only be receiving a $ 500,000.00 BONUS this year, instead of the expected regular $ 510,000.00 dollar bonus (for excellent public service). Lol.

  13. The EEOC is an affront to liberty and the constitution. No justification for its existence can exist except by a tortured reading of the constitution that involves both negating the 1st, 4th, and 5th amendments and accepting a positively Orwellian interpretation of the interstate commerce clause. Even if one accepts the tortured interpretations of the ICC, any laws that come from said interpretations but contradict the amendments should be superceded by the amendments: they came later, and, as such, are supposed to take precedence when conflict arises. Let’s repeal the interstate commerce clause and return liberty to this country.

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