Header graphic for print
The Labor & Employment Report

EEOC Slapdown Over Meritless Criminal Background Check Lawsuit

Posted in Background Checks, Employment Discrimination, Litigation, Workplace Trends

I like the EEOC – I really do.  They do important work, and most of the time they seem to get it right.  But every once in a while they dig in their heels over something patently ridiculous, leaving employers and management attorneys like me tearing out our hair in frustration.  So there’s no small measure of satisfaction when the EEOC gets benchslapped by a court for engaging in an unreasonable lawsuit, as just happened in EEOC v. Peoplemark, Inc.

As I mentioned in a recent blogpost, EEOC’s Attempt to Prohibit Use of Background Checks Rejected, the EEOC is being rather aggressive in its pursuit of employers using criminal background checks in the hiring of employees.  Although the EEOC’s own Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions contemplates the reasonable use of criminal records, the EEOC has been pursuing criminal background check claims against employers that just don’t make sense.

In the Peoplemark case, the EEOC brought suit against a temporary staffing company because a company VP told the EEOC that the company had a policy of denying jobs to those with felony records.  It turned out that the VP was mistaken (and what a mistake that was!), but the EEOC pursued the case even after it was clear that no such policy existed and that the company did, in fact, refer felons for jobs.  After the case was finally dismissed, the trial court scolded the EEOC for bringing a lawsuit that lacked merit from the beginning and forcing the company to incur significant defense fees and costs.  Deeming the EEOC to be unreasonable in continuing to litigate even after it was clear that there was no basis for its claims, the court ordered the EEOC to pay the company $219,000 in attorneys’ fees and $526,000 in expert fees, plus costs.  This award was upheld on appeal to the U.S. Court of Appeals for the 6th Circuit.

Frequently employers are forced to spend excessive sums of money to defend against frivolous claims.  Rarely do courts award fees and costs to employers who successfully defend themselves against such claims, and realistically, individual plaintiffs could rarely afford to pay them in any case.  So it really warms my heart on those extraordinary occasions when justice is served!  Three cheers!