Posted Dec 22, 2010 01:19 pm CST
The Equal Employment Opportunity Commission claims in a lawsuit that Kaplan Higher Education Corp. discriminated against black job applicants because it used credit checks in hiring.
The suit claims checking credit histories had a disparate impact on the black applicants, according to stories by the New York Times and the Washington Post. The suit, filed in federal court in Cleveland, seeks an injunction against the practice, along with lost wages and job offers for those who weren’t hired because of the credit checks.
According to the Post story, credit histories generally may be considered in hiring, but only if they are justified by business needs. Several states, however, have banned or restricted the use of credit histories in hiring, including Hawaii, Washington, Oregon and Illinois, the AP story says.
One critic of the practice is Chi Chi Wu, a lawyer with the National Consumer Law Center, the Post story says. She told the EEOC in October that using credit histories can result in a Catch-22 for job seekers. “You can’t re-establish your credit if you can’t get a job, and you can’t get a job if you’ve got bad credit,” she said.
Kaplan defended its background checks in a statement. “The checks are job-related and a necessity for our organization to ensure that staff handling financial matters, including financial aid, are properly screened,” the company said.
ABAJournal.com: “EEOC: Overusing Background Checks May Lead to Discrimination”