Lawsuit Alleges Hiring Discrimination Due to Credit Background Checks

Nick Fishman

We’ll be keeping a close eye on this case which alleges that the University of Miami medical school “violated Title VII of the Civil Rights Act by rejecting or firing qualified individuals because of their credit background, even though credit history does not predict employment performance.”

I’m certain we don’t entirely agree with that statement, but you might want to check out our recent white paper, “Credit Reports and the Hiring Process: The Value (And Risk) to HR Professionals“.

The firm filing on behalf of the plaintiff is no stranger to such cases.  They have brought suit against many an employer for perceived discriminatory hiring practices involving background checks including a high profile case involving a Madison Square Garden employee.

See release below from the plaintiff’s firm.  We are eager to see the University of Miami’s response and will publish as soon as we do.

The University of Miami conducts background checks that discriminate against African Americans and Latinos, a class action lawsuit filed in Miami federal court today alleges. The lawsuit, filed on behalf of Loudy Appolon of Miami, Florida, accuses the University of violating Title VII of the Civil Rights Act by rejecting or firing qualified individuals because of their credit background, even though credit history does not predict employment performance. In fact, there is no correlation between credit history and job performance or trustworthiness, and credit reports are often rife with inaccuracies.

Samuel R. Miller, a senior attorney at Outten & Golden LLP, said, “By all accounts, Ms. Appolon was well-qualified for the position – that’s why the University of Miami offered her the job. But instead of evaluating Ms. Appolon on an individual basis, as a person who – like many Americans today – may have struggled with and overcome some personal financial difficulties, and who showed promise to be an excellent employee, the Hospital stigmatized her based on her credit history. When companies act this way, they make it impossible for Americans to break the cycle of lending and bad credit, rebuild their lives, and contribute to their families and communities. And the employers hurt themselves by losing out on some of their best potential workers.”

Sarah Crawford, counsel with the Lawyers’ Committee for Civil Rights Under Law, stated, “The University of Miami’s policies and practices are illegal because they adopt and perpetuate the racial disparities in the credit system. We see this problem occurring in private and public employment across the country, despite the fact that employers, credit reporting agencies, and researchers have found no link between credit history and job performance. At a time when unemployment rates are skyrocketing, particularly for minority jobseekers, this unjustified and discriminatory practice only exacerbates the problem. Employers need to know that the practice is discriminatory and must end.” Ms. Crawford testified about the discriminatory effects of credit checks at an October 20, 2010 hearing of the Equal Employment Opportunity Commission.

According to the Complaint, “Defendants’ hiring policy duplicates the racial discrimination present in the credit reporting system . . . This discriminatory denial of employment affects not only the individuals who are rejected or terminated, but also their families and entire communities, replicating minority under-employment and compounding credit inequities in the process.”

The lawsuit alleges that Ms. Appolon interviewed for a senior medical collector position with the University of Miami, Miller School of Medicine in June 2009. She was offered the position, but the day before she was due to start her new job — after she had already resigned from her previous job — the University informed Ms. Appolon that she would not be hired because of her credit history. “I was shocked,” says Ms. Appolon. “I’ve worked in this industry for years, and my credit was never a problem.”

Nick Fishman
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Nick Fishman

Nick Fishman is the co-founder of EmployeeScreenIQ, a leading, global employment background screening provider, and serves as the company’s executive vice president and chief marketing officer. He pioneered the creation of EmployeeScreen University, the #1 educational resource on employment background checks for human resources, security and risk management professionals. A recognized industry expert, Nick is a frequent author, presenter and contributor to the news media. Nick is also a licensed private investigator in the states of Ohio and Texas.
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    When it comes to personal information be in it on the internet where it was not initially authorized or using your credit information to determine if you are a reliable employee or not, we as American citizens are losing our rights and it is the cause for a new civil rights movement……that involving ALL people from all walks of life and their ability to better their lives w/o the faulty judgement of human character that all of this is causing. Esp, considering the fact that larger bodies beyond that of the individual level (financial, government, businesses) that govern our lives are quite predatory to certain individuals. It’s a new form of discriminatiohn and the ability to better the quality of your life is inhibited by it. It seems quite unconstitutional if you ask me.