Dallas, TX – Freeman may finally be free from allegations leveled by the federal government that its policy of conducting criminal background and credit checks of prospective employees discriminated against minority applicants.
The U.S. Fourth Circuit Court of Appeals last month upheld a Maryland federal court ruling that dismissed the 2009 lawsuit filed against Freeman in 2009 by the U.S. Equal Employment Opportunity Commission (EEOC). The basis of the dismissal was that an analysis of Freeman’s hiring, which had been a key piece of the EEOC’s evidence in the lawsuit, included so many errors that it did not meet the standards of evidence and was properly thrown out by the lower-court judge.
“We are thrilled that the U.S. Court of Appeals affirmed the dismissal of the EEOC’s case against Freeman alleging that our background policies were discriminatory,” Freeman CEO Joe Popolo said. “Freeman has always maintained that its careful and appropriate practice of using criminal background checks is fair and consistent with business necessity. We made the decision early on to fight this case on behalf of our clients and our employees because we felt strongly that the EEOC was wrong on the facts and the law. We are proud of our diverse group of employee owners, and we are so glad the courts have upheld our right to use common-sense business practices,” he said.
There was no immediate word from the EEOC on whether they would appeal the ruling or otherwise continue to pursue its case against Freeman.
The EEOC had contended that checks of credit histories and criminal background by Freeman had resulted in a pattern of discrimination that placed black and Hispanic applicants at a disadvantage. It also alleged that the scope of the checks was not a business necessity for Freeman’s role as a general services contractor.
It was noted in court documents that Freeman had modified its requirements twice since 2001 and had ended its credit checks in 2011. The company also gave new hires time to clear up any outstanding warrants or other legal issues.
The agency’s case relied on the conclusions of a consultant who analyzed the background check logs of thousands of applicants, which was boiled down to 2,014 individuals. Freeman successfully had the report excluded from evidence because it was incomplete and riddled with mistakes that it essentially worthless under federal evidence laws.
Without the supporting report, the EEOC’s case collapsed and Freeman’s motion for summary judgment was granted by a U.S. District Court judge in Maryland.
The Fourth Circuit upheld the Maryland judge and handed Freeman what will likely be a final victory. “This ruling confirms that the EEOC sued merely on a theory and had no facts to support the claims of discrimination,” said Freeman attorney Don Livingston.
The ruling caught the eye of employment lawyers and bloggers who weighed in that the EEOC had suffered a stinging rebuke. On the other hand, some observers pointed out that the rulings had not shed much legal light on background check program itself, only on the quality of the EEOC’s evidence. They cautioned employers to adhere to current EEOC guidelines for background checks in their own hiring practices.