WASHINGTON – The federal agency that enforces workplace anti-discrimination laws is warning employers they could be sued if they refuse to hire blacks or Latinos because of a bad credit history or a criminal record.
The Equal Employment Opportunity Commission last week sued Kaplan Higher Education Corp., accusing the company of using “a selection criterion for hiring and discharge – namely, credit history information – that has had a significant disparate impact on black job applicants.”
The lawsuit is part of a stepped-up but controversial effort to eliminate “arbitrary barriers” to employment for minorities by the EEOC, which is governed by five commissioners, three appointed by President Barack Obama.
The Civil Rights Act of 1964 forbids racial discrimination by employers. And since the 1970s, courts have said this includes not just blatant bias, but unjustified hiring standards that have an “adverse” or “disparate” effect on blacks and other minorities. But this aspect of discrimination law has remained subject to considerable dispute.
EEOC lawyers say background checks can wrongly exclude a large percentage of minority applicants. “Employers need to be mindful that any hiring practice be job-related and not screen out groups of people, even if it does so unintentionally,” said Debra M. Lawrence, an EEOC lawyer who filed the suit against Kaplan.
But Roger Clegg, a former Reagan administration lawyer, criticized these claims as “fundamentally misguided.”
“If the hiring criterion does not involve race and it was not racially motivated and it was applied evenhandedly, then it’s not racial discrimination,” said Clegg, president of the Center for Equal Opportunity in Virginia. The EEOC, an independent agency with the power to sue employers, recently launched an initiative to “eradicate racism and colorism from employment,” and it filed suits against several employers for their use of background checks in hiring. In one case, Freeman Cos., a national events and exhibitions marketing company, was sued for using criminal records and credit checks to screen job applicants.
The agency’s lawyers have said such hiring practices are not automatically illegal even if they have an adverse effect on minorities. However, an employer must be able to show that a disputed hiring criterion – such as a good credit history or a clean criminal record – is necessary for the job in question.
EEOC lawyers say that since 1987, the agency has advised employers they may be violating the law if they refuse to hire anyone with a criminal record, even if the crime was in the distant past.
“This is not novel. The test is whether the practice has a negative impact on certain groups,” said Carol Miaskoff, an assistant legal counsel for the agency.
The suit against Kaplan accused the company of unlawfully discriminating “by refusing to hire a class of black job applicants nationwide” because of their credit history. It sought a court order forbidding the practice and an award of back pay to the unsuccessful applicants.
Kaplan, a private education company owned by the Washington Post Co., refused to change its hiring standards in response to EEOC’s complaint, and it issued a statement saying it would fight the lawsuit.