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EEOC’s Use Of Visual Race Raters Rejected By Court

Published by on February 8, 2013

In Equal Employment Opportunity Commission v. Kaplan Higher Learning Edu. Corp. et al, the United States District Court in the Northern District of Ohio recently granted summary judgment in favor of an employer and against the EEOC.  The EEOC claimed that the employer’s use of credit reports in the hiring process had an unlawful disparate […]

In Equal Employment Opportunity Commission v. Kaplan Higher Learning Edu. Corp. et al, the United States District Court in the Northern District of Ohio recently granted summary judgment in favor of an employer and against the EEOC.  The EEOC claimed that the employer’s use of credit reports in the hiring process had an unlawful disparate impact on Black applicants.  In granting summary judgment, the district court rejected the attempt of the EEOC’s expert to use visual “race raters” as evidence of the applicants’ race to support the EEOC’s disparate impact claim.  More after the break.

EEOC brought a lawsuit against Kaplan alleging that Kaplan’s use of credit history in making hiring decisions violated Title VII because the practice had a disparate impact on Black applicants.  Kaplan’s financial aid department employees had access to the National Student Loan Data System, which is the Department of Education’s student aid database.  The Department of Education required Kaplan to have quality controls in place that limited access to student and parent information.  Prior to 2004, Kaplan became aware of employees misappropriating student loan payments.  As a result of this misappropriation, Kaplan took additional steps to ensure compliance with the Department of Education guidelines regarding access to the National Student Loan Database.  As part of these additional steps, Kaplan began using credit histories in order to determine whether applicants for certain positions were under “financial stress or burdens” that might compromise their ethical obligations.  Kaplan hired a third party to run credit checks for applicants.  The third party was instructed to flag all candidates whose credit report contained certain information like bankruptcy, overdue child support payments, current wage garnishments, outstanding civil judgment or collections, or any tax liens.  If a candidate was flagged, Kaplan would review a summary of credit report prepared by the third party.  The third party did not inform Kaplan of the race of the applicant.  Kaplan’s various supervisors used different standards to decide whether to hire an applicant who had been flagged.  Kaplan’s evidence also pointed out that the EEOC runs credit reports in the hiring process for 84 of the 97 positions at the EEOC.

Kaplan moved for summary judgment and to strike the EEOC’s expert report.  In an order that was issued on January 28, 2013, the district court granted Kaplan’s motion for summary judgment and motion to exclude EEOC’s expert.  In an attempt to present statistical evidence that the use of credit reports caused the exclusion of Black applicants, the EEOC offered an expert report which used “race raters” to determine the race of particular applicants.  Specifically, the EEOC subpoenaed Department of Motor Vehicle records to determine the race of Kaplan’s applicants.  In 24 States, the DMV did not provide records that identified the applicant’s race, but provided copies of their driver’s license photos.  In order to determine these applicants’ race, the EEOC’s expert assembled a team of five “race raters” who reviewed each photo (and the applicant’s name) and determined the race of the applicant as African-American, Hispanic, White, or Other.  The expert required that four of the five race raters agreed to consider the applicant’s race in his analysis.  In its motion for summary judgment, Kaplan argued that these race raters were nothing more than guesswork, which resulted in unreliable data as the expert’s method had not been tested, was not subject to peer review, and thus, not accepted in the scientific community.  Kaplan argued that it should have contacted the applicants directly to obtain information about their race.  Agreeing with Kaplan, the district court excluded the EEOC’s expert report because the EEOC failed to present sufficient evidence that the use of race raters was reliable.  The EEOC presented no known rate of error for the race rater methodology, or that the methodology was subject to peer review or publication.  The district court also concluded that providing the name of the applicant to the race raters may have created an unintended bias.  Finally, the district court stressed that even the EEOC discourages employers from visually identifying individuals by race and states that it is appropriate only if an employee refuses to self-identify.  The district court found that it is clear that the EECO itself frowns on the very practice it sought to rely on in the case.  Because the EEOC failed to present admissible evidence of disparate impact, Kaplan’s motion for summary judgment was granted.

To read the full Order, click here.

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