Employers Under Fire For Credit Background Checks
SAN FRANCISCO (KCBS)- The Equal Employment Opportunity Commission is suing the Kaplan Higher Education Corporation for allegedly discriminating against African American job seekers by screening their credit backgrounds.
Kaplan argues that they don't discriminate; they conduct credit checks on everyone they hire. Still, there is growing concern that the practice is discriminatory.
Private and government survey suggest about one half of all employers use credit history in at least some of their hiring decisions. William Gould is a Stanford law professor specializing in labor issues, and former chairman of the National Labor Relations Board. He believes the EEOC has a case that will be supported by both state and federal laws.
KCBS Interview with William Gould:
"By virtue of the fact that it can have a disparate impact upon blacks and other racial minorities who are more likely to have difficulties with credit histories than others," said Gould.
A US Supreme Court decision nearly 40 years old establishes this "disparate impact application" of anti-discrimination laws. He also points out that in our current bad economy and with the explosion in identity theft, a credit report may not be telling the entire story.
KCBS' Susan Leigh Taylor Reports:
"What this EEOC decision does is to require employers to be a little more careful," said Gould. "They have to find out what this credit history is actually all about. What is it attributable to? And how does it relate to the job the applicant will be performing?"
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