Federal Court Sends Strong Signal to EEOC in Dismissal of Credit Check Case

By Jon Hyman

Apr. 10, 2014

Last January, a Cleveland federal-court judge dismissed a race discrimination lawsuit brought by the Equal Employment Opportunity Commission against Kaplan Higher Learning. In that case, the EEOC challenged Kaplan’s use of credit reports in its hiring process as having a systemic disparate impact based on race. To support its claim, the agency retained an expert witness to rate (i.e, guess) the unknown races of various job applicants based on how they appeared in Department of Motor Vehicles records. The district court excluded the expert, concluding that his “opinion” was nothing more than guesswork that resulted in inherently unreliable data. With no expert testimony to support its claim, the court dismissed the EEOC’s lawsuit.

Yesterday, in a terse opinion issued a mere 20 days after oral argument, the 6th Circuit affirmed the district court’s dismissal. Here is the entirety of the 6th Circuit’s legal analysis:

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. The district court did not abuse its discretion in excluding Murphy’s testimony.

This case sends a strong signal to the EEOC that it cannot use junk science to further its agenda of eliminating systemic discrimination. What is so striking of the opinion is the brevity of the Court’s four-line analysis. That the 6th Circuit could make quick work of such an important issue speaks volumes of how little it thought of the EEOC’s litigation strategy.

Yet, the Kaplan case is less about whether credit histories disparately impact African Americans than it is about how the EEOC chose to prove its case. Kaplan did not win this case so much as the EEOC lost it by using junk science to support its claim. Employers should see this case for what it is — a stinging rebuke of the EEOC’s litigation tactics — and nothing more. Employers should not take this case as a license to deploy screening practices that might disparately impact applicants based on race, lest you end up the receiving end of the next EEOC lawsuit.

Jon Hyman is a partner in the Employment & Labor practice at Wickens Herzer Panza. Contact Hyman at

What’s New at

blog workforce

Come see what we’re building in the world of predictive employee scheduling, superior labor insights and next-gen employee apps. We’re on a mission to automate workforce management for hourly employees and bring productivity, optimization and engagement to the frontline.

Book a call
See the software

Related Articles

workforce blog


Slow rehiring of child care workers may stymie employers’ return to workplace plans

For parents of young children, a full return to the workforce means having to find quality, affordable ...

child care, compensation, COVID-19, employee engagement, hiring, human resources

workforce blog


Jushi Holdings builds its workforce in the cannabis industry despite pandemic

A broad assortment of talent is finding a new home at Jushi Holdings and in a cannabis industry burning...

cannabis industry, hiring, Jushi Holdings Inc., pandemic, Safety, training

workforce blog


Regulating recruiting amid constant technological innovations

As the competition for talent rages, complex recruiting systems using AI face compliance questions of t...

artificial intelligence, bias, business ethics, data privacy, HR Tech, talent acquisition, tech ethics