Victory in EEOC v. Freeman; strong rebuke for the EEOC

February 20, 2015 | By JOSHUA THOMPSON

This morning the Fourth Circuit rejected the Equal Employment Opportunity Commission’s latest attempt to expand disparate impact law.  In EEOC v. Freeman, the government brought suit against a company that ran employee applicants through criminal background checks before hiring them. The EEOC alleged that Freeman’s criminal background checks constituted unlawful discrimination under the disparate impact provisions of Title VII. In a commonsense decision, the Fourth Circuit held that the district court did not “abuse its discretion” when it excluded the EEOC’s expert testimony. Thus it affirmed the lower court’s grant of summary judgment to Freeman.

The Court’s opinion noted some significant problems with the EEOC’s expert testimony. “The sheer number of mistakes and omissions in Murphy’s analysis renders it ‘outside the range where experts might reasonably differ.'” It quoted extensively from the lower court’s harsh decision, noting that the district court found some of the EEOC’s expert testimony “mind-boggling.” However, in comparison to the concurring opinion filed by Judge Agee, the court’s opinion was relatively tame.

Judge Agee wrote separately to express his “concern with the EEOC’s litigation conduct.” He was “troubled” that the EEOC continues to use “expert testimony from a witness whose work has been roundly rejected in our sister circuits for similar deficiencies to those we observe here.” Indeed, this is one of the points that PLF made in its amicus brief in the case. The EEOC was relying on “expert” testimony from Kevin R. Murphy, who readers of the Liberty Blog might remember from his infamous “expert” testimony in EEOC v. Kaplan. In that case, EEOC tried to introduce evidence assembled by a panel of “race-raters.”  The race-raters assigned races to individuals based on how they “looked” in the their driver’s license photo. [Yes, the EEOC was literally stereotyping people based on pictures.]  In that case, the Sixth Circuit called the EEOC’s expert testimony, “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.”

Undaunted, the EEOC continued to use Mr. Murphy’s “expert” testimony.  Judge Agee took exception.  He noted three particular problems. First, Murphy’s testimony “omitted important information from relevant periods and locations.” Second, he “undeniably ‘cherry-picked” the data he used. Namely, “Murphy was capriciously selective in his use of post-October-2008 data, but the high number of ‘fails’ among his few selections suggests that he fully intended to skew the results.” Third, his “analysis contained many obvious errors and mistakes, and these ‘factual deficiencies’ further evidence his ‘faulty methods and lack of investigation.'”  To wit, “[h]e miscoded criminal and credit check outcomes, as well as race and gender information. And he double-counted other applicants.  … [W]ithin a sample of 41 known ‘victims’ in Murphy’s database, 29 of those 41 (or more than 70%) had errors or omissions.”

But that’s not all, Judge Agee noted that these problems are particularly “disquieting in the context of what appears to be a pattern of suspect work from Murphy.” As evidence of Murphy’s “pattern of suspect work,” Judge Agee quoted extensively from the Sixth Circuit’s decision in Kaplan.  He also noted a decision by the Eleventh Circuit as well as several district court opinions that rejected Murphy’s “expert” testimony for various reasons. Thus, it was quite troubling that “[d]espite Murphy’s record of slipshod work, faulty analysis, and statistical sleight of hand, the EEOC continues on appeal to defend his testimony.”

Judge Agee concluded his concurring opinion by noting why the EEOC’s conduct in this case is so troubling: The agency “wields significant power” that can be “expected to have broader consequence.”  When it wields that power, it “must be constantly vigilant that it does not abuse the power conferred upon it by Congress.”  Here, however, EEOC’s actions suggest “that its exercise in vigilance has been lacking.  It would serve the agency well in the future to reconsider how it might better discharge the responsibilities delegated to it or face the consequences for failing to do so.”

Judge Agee’s opinion is refreshing. For years, the EEOC has been on a disparate impact crusade. PLF files briefs around the country fighting back against this onslaught of litigation by EEOC. EEOC’s Title VII litigation has not only had a profound effect on discouraging legitimate business practice, it inflames racial tension by ensuring that race is the overriding consideration for all employment decisions. The more binding appellate court decisions like this one we can accumulate, the less likely that EEOC can continue in its ways.