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The High Price of EEOC Background Check Litigation

Perhaps one solution to this crisis is for Congress to engage in some simple oversight over the agencies that enforce our various laws, including the EEOC.

October 8, 2013

It’s no secret that criminal background checks rank highly on the Equal Employment Opportunity Commission’s hit list. The EEOC has taken the position that a policy that per se eliminates someone with a criminal history from consideration for employment violates Title VII as having a disparate impact based on race. And, the EEOC is aggressively litigating so that courts will bless its non-binding enforcement guidance on this topic and make it law.

What happens, however, when the EEOC litigates this point despite proof that an employer does not have a policy of rejecting felony applicants? A court of appeals affirms a three-quarters of a million dollar attorneys’ fees judgment against the agency and in favor of the employer against whom it unreasonably litigated. That is exactly what the 6th Circuit did yesterday in EEOC v. Peoplemark, Inc. [pdf].

The district court did not abuse its discretion when it found that the Commission could not prove its case as pleaded…. As is required, the Commission pleaded a specific employment practice—a companywide policy of denying employment opportunities to felons. That policy did not exist, and the claim the Commission pleaded could not be proved….

We are not focused on the Commission’s theory of the case, but rather, whether the claim was frivolous, unreasonable, or groundless, or whether the Commission continued to litigate after it clearly became so. As the Commission admits in its brief, it “pled a blanket policy.” The only employment practice it pleaded—and as a direct result, the only claim it pleaded—could not be proved.

We are currently ensnarled in a ugly budget fight that has shuttered our federal government. Perhaps one solution to this crisis is for Congress to engage in some simple oversight over the agencies that enforce our various laws, including the EEOC. $751,942.48 in taxpayer money is a costly investment to chase a foo'ls errand.

Written by Jon Hyman, a partner in the Labor & Employment group of Kohrman Jackson & Krantz. For more information, contact Hyman at (216) 736-7226 or jth@kjk.com. You can also follow Hyman on Twitter @jonhyman.