Employment: Employers Relying Upon Credit Checks Under Attack

01.01.11

For years, the EEOC has often viewed what appear to be benign employer practices and found underlying discriminatory impact. Well, the agency is trying its hand at proving an employer's use of credit checks constitutes has an adverse discriminatory impact upon Black applicants and incumbents.

On December 21, the EEOC sued Kaplan Higher Education in Ohio alleging that its use of credit histories is not job related and consistent with business necessity. The EEOC further alleges these credit checks have had an adverse impact based upon race.

The EEOC is not alone. Last month, a class action was filed against the University of Miami alleging that its use of credit histories in screening applicants had a disparate impact on African Americans and Latinos.

While it could be some time before we have an answer from the Courts, it is a reminder that employers should be vigilant in ensuring that all hiring criteria it uses be both job-related and consistent with business necessity.

NOTE: For a discussion on the right way to conduct background checks, see our article in the December Employer's Legal Resource.

By Kristen L. Brightmire, kbrightmire@dsda.com

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Rebecca D. Bullard

Rebecca D. Bullard

Rebecca represents clients primarily in labor and employment litigation and counsels clients regarding everyday employment matters. 

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