Once again, EEOC gets dressed down for investigation tactics
A federal judge has slapped down the Equal Employment Opportunity Commission for its enforcement methods.
A federal appeals court upheld the dismissal of the EEOC’s lawsuit against Kaplan Higher Education Corp., in which the agency accused the company of improperly using credit histories to screen job applicants.
Irony alert: The EEOC itself uses credit checks to vet applicants for 84 of the 97 positions at the agency.
‘Race rating’ through photos
Here’s the background of the case:
The basis of the lawsuit was the allegation that Kaplan’s use of credit checks was discriminatory toward black candidates.
Kaplan began the practice when it ran into problems concerning misappropriated student payments. It ran checks on applicants for senior-executive positions, accounting and other positions with access to company financials or cash, and positions with access to student financial-aid information.
Those checks were performed by third-party vendors; their reports didn’t specify the race of the applicant.
To prove the credit checks were having a disparate impact on black applicants, the EEOC relied on Kevin Murphy, who holds a doctorate in industrial and organizational psychology.
Murphy gathered 4,670 credit check reports — but since those reports had no race identification, the subpoenaed records from the departments of motor vehicles. Eleven states provided records that identified an applicant’s race. Thirty-six states and the District of Columbia provided color copies of drivers’ license photos for approximately 900 applicants.
Murphy then assembled a team to examine each driver’s license photo and determine the individual’s race — a technique the EEOC called “race rating.”
Murphy directed each rater separately to review each applicant’s drivers’ license photograph and then classify the person’s race in one of five ways: “African-American,” “Asian,” “Hispanic,” “White,” or “Other.” If four of five raters agreed upon a particular applicant’s race, the applicant was so classified. For 11.7% of the photographs, the raters failed to reach that consensus.
In that sample of 1,090 applicants (out of a total of 4,670 applicants for whom GIS provided data), the percentage of black applicants who were flagged for review, based upon their credit histories, was higher than the percentage of white applicants
who were flagged.
The numbers don’t match
But there was a disconnect: Murphy’s sample found 23.8% of the applicants in the pool 1,090 were rejected because of their credit history. Only 13.3% of the total pool of 4,670 were rejected.
The district court found that Murphy’s research technique was flawed and unreliable.
And the appeals court agreed. Two memorable quotes from the ruling:
In this case the EEOC sued the defendants for using the same type of background check that the EEOC itself uses.
… 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.
Case closed.
Cite: EEOC v. Kaplan.
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