Appellate Court To EEOC: No Soup for You!

Nick Fishman

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You might recall last August that we posted about celebrated Judge Roger Titus’ stinging comments directed at the EEOC when he dismissed their case against Freeman Companies for what the commission alleged as discriminatory hiring practices related to Freeman’s use of criminal background checks and credit reports. He used the words “Laughable”, “Unreliable”, “Mind Boggling”.

No Soup for You!

Instead of heeding Judge Titus’ remarks and conceding their overreach, EEOC appealed his ruling to the Fourth Circuit Court of Appeals. At issue was the testimony of the EEOC’s expert witness, Dr. Kevin Murphy, which was excluded by the lower court. In this regard, Judge Titus was unrestrained when it came to his opinion.

He described Murphy’s research as “laughable”; “based on unreliable data”;  “rife with analytical error”; containing “a plethora of errors and analytical fallacies” and a “mind-boggling number of errors”; “completely unreliable”; “so full of material flaws that any evidence of disparate impact derived from an analysis of its contents must necessarily be disregarded”; “distorted”;  “both over and under inclusive”; “cherry-picked”; “worthless”; and “an egregious example of scientific dishonesty.”

Last week, the court affirmed Judge Titus’ decision. And while the ruling comes as no surprise, the blistering remarks the Fourth Circuit used in affirming the decision are as illuminating as they are instructive on how they may react to future EEOC cases. In concurring with the majority opinion, Judge G. Steven Agee wrote the following:

“I write separately to address my concern with the EEOC’s disappointing litigation conduct. The Commission’s work of serving “the public interest” is jeopardized by the kind of missteps that occurred here.”

“And it troubles me that the Commission continues to proffer expert testimony from a witness whose work has been roundly rejected in our sister circuits for similar deficiencies to those we observe here [note that Murphy’s data was roundly rejected in EEOC v. Kaplan]. It is my hope that the agency will reconsider pursuing a course that does not serve it or the public interest well.

Read the Court’s Full Opinion

Judge Agee cautions the EEOC with the following concluding remarks:

“The EEOC wields significant power, some of which stems from the agency’s broad discretion to investigate, conciliate, and enforce, and some of which derives from public actions that exert influence outside the courtroom. The Commission’s actions can be also expected to have broader consequences than those of an ordinary litigant given the “vast disparity of resources between the government and private litigants.” EEOC v. Great Steaks, Inc., 667 F.3d 510, 519 (4th Cir. 2012).

In deciding when to act, the Commission must balance sometimes-competing responsibilities. On the one hand, the agency must serve the employee’s interest by preventing an employer from “engaging in any unlawful employment practice” under Title VII. 42 U.S.C. § 2000e-5(a). On the other hand, “the EEOC owes duties to employers as well: a duty reasonably to investigate charges, a duty to conciliate in good faith, and a duty to cease enforcement attempts after learning that an action lacks merit.” EEOC v. Argo Distrib., LLC, 555 F.3d 462, 473 (5th Cir. 2009). That the EEOC failed in the exercise of this second duty in the case now before us would be restating the obvious.

The EEOC must be constantly vigilant that it does not abuse the power conferred upon it by Congress, as its “significant resources, authority, and discretion” will affect all “those outside parties they investigate or sue.” EEOC v. Propak Logistics, Inc., 746 F.3d 145, 156 (4th Cir. 2014) (Wilkinson, J., concurring). Government “has a more unfettered hand over those it either serves or investigates, and it is thus incumbent upon public officials, high and petty, to maintain some appreciation for the extent of the burden that their actions may impose.” Id. The Commission’s conduct in this case suggests that its exercise of vigilance has been lacking. It would serve the agency well in the future to reconsider how it might better discharge the responsibilities delegated to it or face the consequences for failing to do so.”

How’s that for a beat down?

In the End, Who Won?

It would appear that Freeman Companies has finally won after seven years of litigation, right? Yes, they’ve prevailed in court, but how many millions of dollars did they expend defending themselves? How many hours did it take to prepare discovery, take depositions, testify in court, etc. to defend their lawful employment background screening practices? Indeed, a hollow victory.

It seems to me that everyone has lost here (maybe with the exception of Akin Gump who expertly defended FreemanJ). The EEOC certainly lost in court. One would think that Dr. Kevin Murphy will no longer be collecting a paycheck as an expert witness for the EEOC (or will he?). Freeman is out millions of dollars. And, oh yeah, so are the American people who bankrolled EEOC’s case.

Time to Moderate

It bears repeating that I am not anti-EEOC. They absolutely serve an admirable purpose in our society. My concern is that they have been operating outside the lines for some time now with no check on their authority. And once again, no one wins when that happens.

It is time for them to rethink their position on employee background checks and aggressive litigation tactics where it’s okay to ignore facts that don’t fit their narrative.

There is a responsible middle ground here that doesn’t sacrifice public safety, preclude employers from exercising proper due diligence or risk discriminating against protected class populations.

I don’t have all of the answers, but let’s start by disallowing arrest records that don’t result in convictions. Perhaps a national and uniform ban the box provision which (only) precludes employers from asking a candidate if they’ve been convicted of a crime on a job application. Oh and for good measure, let’s ask the EEOC to adhere to the same background screening guidance they impose on employers.

I think Judges Titus and Agee would be more amenable to EEOC’s arguments under these circumstances.




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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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