April 10, 2014

EEOC: disparate impact for thee, but not for me

By Anastasia P. Boden Attorney

Yesterday the Sixth Circuit shut down the Equal Employment Opportunity Commission’s suit against Kaplan University in EEOC v. Kaplan.  EEOC had alleged that Kaplan’s policy of conducting credit checks on job applicants had a disparate impact on minorities.  Perhaps EEOC is unaware of the saying, “when you point one finger at others, you point three at yourself,” because the Commission also uses background checks when hiring—a fact that did not go unnoticed by the Sixth Circuit.  Worse, in order to prove that Kaplan’s policy had a disparate impact on minorities, EEOC hired a panel of “race raters” and tasked them with “eyeballing”—as the Sixth Circuit put it—the rejected applicants’ DMV photos, taking a crack at their race, and categorizing the applicants into one of five races according to their best guess.  Today’s opinion focused on the reliability, or as the Court noted, “the lack thereof” of that process.

Pacific Legal Foundation submitted an amicus brief—joined by Project 21, Center for Equal Opportunity, Competitive Enterprise Institute, and the Cato Institute—that made the modest argument that government can’t judge individuals based on the color of their skin.  Any time government makes racial classifications, it gets itself into the unsavory and divisive business of defining race and determining who belongs, which can perpetuate stereotypes, discount multi-racialism, and violate the Constitution’s promise of color-blindness.  But as we note, EEOC’s actions in this case are particularly pernicious: race is a much richer concept than “looks.”

We further noted the perverse consequences of disparate impact theory in the context of Title VII.  By punishing employers for hiring disparities that result from race-neutral policies, disparate impact liability encourages employers to engage in covert racial balancing.  That is, because employers must now fear any racial imbalance in their workforce, even those that occur naturally, they may be coerced into making race-conscious employment decisions.  Thus, disparate impact liability subverts Title VII’s primary purpose—prohibiting disparate treatment—to its secondary purpose of prohibiting disparate impact, and raises serious Equal Protection concerns.

The Sixth Circuit swiftly disposed of EEOC’s “scientific evidence” of disparate impact.  The Court noted “We need not belabor the issue[.] The EEOC brought this case on the basis of a homemade methodology, crafted by a witness with no particular expertise to craft it, administered by persons with no particular expertise to administer it, tested by no one, and accepted only by the witness himself. The district court did not abuse its discretion in excluding [the race raters’] testimony.”

Ouch.

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