Ohio Judge Dismisses Federal Suit Over Credit Histories in Hiring of Blacks

Published: January 29, 2013
A federal judge in Ohio has dismissed a lawsuit that accused the Kaplan Higher Education Corporation of discriminating against black job applicants.
In a ruling issued on Monday, Judge Patricia A. Gaughan of the Northern District of Ohio granted partial summary judgment in a case in which the Equal Employment Opportunity Commission had contended that Kaplan in effect discriminated against African-American applicants by rejecting some job seekers because of their credit histories. The commission has asserted that rejections based on aspects of applicant’s credit histories, like falling behind on bill-paying, have a disparate effect on black applicants without being directly relevant to their future job performance.
Judge Gaughan granted Kaplan’s motion to exclude an expert witness for the E.E.O.C., concluding that the way he determined which applicants were black was unscientific and unreliable. The expert witness had assembled a group of five “race raters” to look at photos of the job applicants and then say which ones they thought were black.

In granting the motion to exclude the expert’s testimony, Judge Gaughan said the commission no longer had the evidence needed to make its case.
Kaplan, which is a unit of The Washington Post Company, welcomed the ruling. “Kaplan maintained from the beginning that the E.E.O.C. lawsuit was without merit,” the company said in a statement. “Our practices mirrored what is standard practice for many private companies and some government agencies.”
A spokeswoman for the E.E.O.C. said that the commission “is reviewing the district court’s decision carefully and is considering all options.”
Several states, including Hawaii, Oregon and Illinois, have banned or limited the use of credit reports in hiring, partly out of concern that this practice could prevent unemployed, financially pressed Americans from getting back into the work force.

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