Ending a two year dispute, Kaplan Higher Learning Education Corp. has won a summary judgment in a nationwide hiring discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC) over Kaplan’s use of credit checks as part of its hiring process that the EEOC alleged violated Title VII due to an unlawful “disparate impact” on Black applicants. The full summary judgment in the case of EEOC vs. Kaplan is available at https://www.esrcheck.com/file/EEOCvsKaplan_SummaryJudgment.pdf.

The plaintiff EEOC – the agency that enforces federal laws prohibiting employment discrimination –  brought this  lawsuit against defendants Kaplan Higher Education Corporation (“KHEC”), Kaplan, Inc. (“KI”), and Iowa College Acquisition Corporation d/b/a/ Kaplan University (“KU”). The suit alleged that Kaplan’s use of credit history in making hiring decisions violated certain provisions of Title VII [42 U.S.C. § 2000e-2(a)(1), (a)(2) and (k)] since the practice had a disparate impact on Black applicants.

The EEOC offered the testimony and report of their expert to support its position that Kaplan’s use of credit reports disparately impacted Black applicants in violation of Title VII.  Kaplan moved to exclude the expert’s testimony and report on the grounds that the method of determining race was scientifically unsound, the sample used was not representative of the applicant pool, and the analysis failed to account for non-discriminatory variables that could account for any disparate impact.

In the summary judgment, U.S. District Judge Patricia A. Gaughan found that the “race rating” system used by the EEOC’s expert to assess the effect Kaplan’s credit report check system had on minority applications was not scientifically sound enough to produce admissible results. Judge Gaughan wrote:

Because plaintiff fails to present admissible evidence showing that the use of credit reports “caused the exclusion of applicants…because of their membership in a protected group,” plaintiff cannot set forth a prima facie case of disparate impact discrimination. As such, summary judgment in favor of defendants is warranted and the Court will not reach defendants’ alternative arguments, i.e., job relatedness, business necessity, and estoppel.

In December of 2010, the EEOC filed a nationwide hiring discrimination lawsuit against Kaplan Higher Education Corp., a nationwide provider of postsecondary education, charging that the company engaged in a pattern or practice of unlawful discrimination by refusing to hire a class of black job applicants. The suit also alleged that Kaplan’s use of credit histories of job applicants discriminated due to race. The EEOC press release about the lawsuit is at http://www.eeoc.gov/eeoc/newsroom/release/12-21-10a.cfm.

Employment Screening Resources (ESR) – ‘The Background Check Authority’ – is a nationwide background screening provider accredited by The National Association of Professional Background Screeners (NAPBS®). For more information about background checks from ESR, visit https://www.esrcheck.com, call Toll Free 888.999.4474, or email [email protected].

Source: https://www.esrcheck.com/file/EEOCvsKaplan_SummaryJudgment.pdf

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