Credit history screenings challenged Credit history screenings challenged

By Lindy Korn
The Daily Record Newswire

Do credit histories predict useful job performance?

Are people with bad credit ratings prevented from getting hired?

Do credit checks disproportionately screen out women, minorities and other protected groups?

The Equal Employment Opportunity Commission recently filed suit against Kaplan Higher Education, alleging that the company’s practice of denying jobs to candidates based on their credit histories had a disparate impact on African-American job applicants nationwide.

The federal lawsuit is seeking a permanent injunction to stop Kaplan’s use of credit histories in hiring and other employment decisions.

The agency is also seeking lost wages and benefits for people who were not hired because of Kaplan’s use of credit reports to screen applicants.

The EEOC wants Kaplan to make employment offers to those individuals.

The company maintains that “the checks are job-related and a necessity for the organization to ensure the staff handling financial matters, including financial aid, are properly screened.”

In the first suit of its kind, a class action was filed in November 2010 in Florida against a university for its pre-hiring credit screening practices, alleging that the practice had a disparate impact on African-American candidates, Appolon v. Univ. of Miami School of Medicine, no. 1:10-cv-24166, (Florida, Southern District).

Loudy Appolon, a Miami woman, was offered a position at the University of Miami School of Medicine as a senior medical bill collector.

The employer reneged on the offer after it ran a credit check, even though, according to her complaint, her reports contained no pending delinquencies and only a few prior defaults that Appolon had cleared up with lenders.

Her complaint also alleges that in her previous job as a medical collector she handled confidential patient information including credit card numbers and Social Security numbers.

The suit seeks class certification for all African-American and Latino individuals who suffered adverse employment actions based on their credit background since June 24, 2009, and seeks declaratory judgment, injunctive relief, damages and attorney fees.

In a disparate impact claim, the plaintiff will first have to prove that credit screening in fact has a disproportionate impact on the protected class, most likely through statistical analysis.