Attorneys representing the Equal Employment Opportunity Commission (EEOC) had a busy week in court in early September. The government agency that oversees the laws, rules and regulations of background checks was dealing with two cases, that, as we’ve previously reported on the ActiveCare Blog, may have major implications on the EEOC’s credibility and the screening industry.

In one case, the government agency got a win when it settled a criminal background check lawsuit against BMW for $1.6 million. In another case, however, a federal judge dealt the EEOC a significant blow by ordering it to the pay attorneys’ fees totaling nearly a million bucks for overly aggressive tactics.

Let’s examine the backgrounds, rulings and implications of each case.


Background – The complaint was originally filed in 2013 after the EEOC raised concerns about how background checks were performed on 69 African American employees of a sub-contractor used by BMW at one of its South Carolina plants. The EEOC
took issue with BMW’s response to background checks that returned with red-flagged criminal convictions. In all, BMW revoked access to its facility, and thus terminated employment with, 88 workers after learning of their criminal pasts.

BMW’s employment policy excludes anyone who has been convicted of murder, assault and battery, rape, child abuse, domestic violence, weapons violations or the manufacture or distribution of drugs. The policy makes no distinction between felony or misdemeanor convictions.

Ruling – The biggest issue here is that BMW used a blanket policy for eliminating or terminating candidates with certain types of criminal convictions. The EEOC’s guidance, though, is explicit that blanket policies are not allowed. Instead, employers need to review each employee on a case-by-case basis and that the job needs to be weighed against the type of crime.

Implications – It’s interesting to note that EEOC guidance is merely that, guidance, and is not law. The judge in this case made clear, though, that blanket policies will be scrutinized. It may be best if employers steer clear of these policies.


Background – Freeman is a live event services provider. In 2009, the EEOC filed a lawsuit against Freeman based on a woman who claimed she didn’t get hired after Freeman pulled her credit history. The EEOC claimed that using applicants’ credit history in the application process had a disparate impact on African-Americans, and that using applicants’ criminal histories had a disproportionate impact on African-American men. The case, which Freeman ultimately won, dragged on for roughly four years even after a lower court had dismissed the EEOC’s claim.

Ruling –
This one got nasty – especially for the EEOC. A judge accused the EEOC statistician of being “an egregious example of scientific dishonesty.” The stats guy was called upon to show statistical evidence of racially disparate impact but, in fact, ended up being accused of cherry-picking stats to support the EEOC’s cause. In last week’s ruling, the court stated that the EEOC’s “inexcusably slipshod” evidence should have informed it that “Freeman held a royal flush, while the EEOC held nothing,” according to The National Law Review.

Implications – The takeaway for employers is that the EEOC isn’t always a winner, despite its aggressive tactics. This case is also proof that the EEOC will go to bat for something it feels is wrong, so employers need to perform an incredible amount of due diligence in examining their own hiring procedures, and criminal and credit background checks.

Active Screening wants to help employers succeed at implementing a solid, and legal, background check process. We have compiled a compliance checklist for employers to use as a reference. 

Compliance Checklist:

1 Have an updated copy of the Fair Credit Reporting Act to reference.

2 Know the definitions the FCRA uses.

3 Provide potential employees with a clear disclosure.

4 Identify self and purpose for screening.

5 Make sure you have written consent from applicant.

6 Do not use alternative methods for screening, i.e. Google or social media.

7 Follow procedures to ensure report accuracy.

8 Re-verify results.

9 Perform an individual assessment before making a hiring decision

Employers taking adverse action must:

1 Provide oral, written or electronic notice to applicant about the Credit Reporting Agency.

2 Must include: name, address and number of the CRA that furnished the report.

3 Must also include: A statement that CRA had no influence on adverse action.

4 Provide notice that applicant may obtain report and dispute accuracy of report.

Click here if you prefer to download the list and print it out.

If you want to read the EEOC’s compliance guidelines yourself, check out this page on our resources page. You’ll get to read the joint publication by the Federal Trade Commission and the EEOC. 

Looking for more advice? Our Active Screening team members are always available. Reach us at 1-800-319-5580.

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