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Verrill Dana, LLP

Verrill Dana, LLP is one of New England's preeminent regional law firms. With offices in Portland and Augusta, ME; Boston, MA; Westport, CT; Providence, RI; and Washington D.C. Verrill Dana provides sophisticated legal representation to businesses and individuals in the traditional areas of litigation, real estate, business law, labor and employment law, employee benefits, environmental law, intellectual property and estate planning.  The Firm also has industry-focused specialties including higher education, health care and health technology, energy, and timberlands. 

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“Cherry-Picked” Data Leads to Dismissal of EEOC’s Disparate Impact Claim

On Friday, the United States District Court for the District of Maryland found that the Equal Employment Opportunity Commission (“EEOC”) had failed to show that a nationwide event planning company’s use of criminal background and credit checks resulted in a disparate impact against male and black job applicants.
The EEOC alleged that Freeman (aka TFC Holding, Inc.), an event-planning firm, violated Title VII by using credit and criminal background checks in such a way that discriminated against Hispanic, black, and male job applicants based on race and sex. The parties had stipulated that the EEOC’s claims on behalf of Hispanic workers would be dismissed with prejudice, which left two classes of job applicants remaining: 51 black workers who had applied for jobs between March 23, 2007, and August 11, 2011, who were disqualified based on their credit history; and 83 black and male workers who applied for jobs between November 30, 2007, and July 12, 2012, and were disqualified based on their criminal records.
The court found that expert reports presented by the EEOC were inadmissible to establish the alleged disparate impact claims, calling the analysis, “flawed,” “skewed,” “rife with analytical errors,” “laughable,” and “an egregious example of scientific dishonesty.” The court further found, “there appears to be such a plethora of errors and analytical fallacies underlying [the expert’s] conclusions to render them completely unreliable, and insufficient to support a finding of disparate impact.” The court found the expert had simply “cherry-picked” a few individuals from the company’s logs and “deliberately ignored” the remaining available data in an effort to “pump up” the number of applicants deemed ineligible for employment following a background check.”
Even without regard to the expert report, the court found that the EEOC had failed to meet its burden of raising triable disparate impact claims because the EEOC did not identify a specific employment practice responsible for the alleged impact. Of further importance, the court held that the EEOC could not rely on national statistics showing racial disparities with respect to credit ratings, arrests, and convictions because they were not directly applicable to the commission’s specific claims; in part, because the EEOC did not show that the general population captured in these statistics was representative of the pool of Freeman applicants during the relevant time period.
If your company is using credit or criminal background checks don’t miss Thursday’s Webinar, “Employment Sunscreen: Protecting Yourself at the Hiring Stage”, where we will discuss this issue, and many more related to the best-practices to avoid hiring a problem employee.

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