thBy Gerald L. Maatman, Jr., Pamela Q. Devata, and Jason Englund

Today the U.S. Court of Appeals for the Fourth Circuit dealt a lethal blow to the EEOC’s hiring check enforcement litigation in EEOC v. Freeman, No.13-2365 (4th Cir. Feb. 20, 2015).  The decision affirms a summary judgment ruling by Judge Roger Titus of the U.S. District Court for the District of Maryland last August (discussed here) which dismissed the EEOC’s nationwide pattern or practice lawsuit due to the EEOC’s reliance on “laughable” and “unreliable” expert analysis.  The EEOC had alleged that Freeman, Inc., a service provider for corporate events, unlawfully relied upon credit and criminal background checks that caused a disparate impact against African-American, Hispanic, and male job applicants.  In today’s ruling, the Fourth Circuit unanimously affirmed Judge Titus’ rejection of the “utterly unreliable analysis” of the EEOC’s expert, while a concurring judge went out of his way to chide the EEOC at length for its litigation tactics across this line of systemic background check cases.

The ruling is a stunner. It is well worth a read by any corporate counsel or business executive dealing with EEOC enforcement litigation.

The Fourth Circuit’s Opinion

The Fourth Circuit’s opinion centers on a series of “expert” reports prepared by the EEOC’s statistical expert, Dr. Kevin R. Murphy, which the District Court excluded due to a “plethora of errors and analytical fallacies.”  The Fourth Circuit reviewed the exclusion of the report for “abuse of discretion,” but roundly ratified the District Court’s reasoning, agreeing that the alarming number of errors and analytical fallacies” in Dr. Murphy’s report made it “impossible to rely on any of his conclusions.”

In rejecting Dr. Murphy’s report, the Fourth Circuit catalogued the “mind-boggling number of errors and unexplained discrepancies” identified by Judge Titus, including missing data, basic mathematical errors, and incorrect coding of race and background check results.  The Fourth Circuit placed particular emphasis on the highly selective sample, which analyzed only a limited number of background checks and excluded the data pertaining to “hundreds, if not thousands, of applicants” that were available for the relevant time period.  The Fourth Circuit concluded that the “sheer number of mistakes and omissions in Murphy’s analysis renders it outside the range where experts might reasonably differ.”  Finding that the expert’s report was properly excluded, the Fourth Circuit affirmed summary judgment for Freeman.

This ruling is the latest in a string of defeats to the EEOC in its campaign to challenge employer’s use of background checks in hiring decisions.  The Fourth Circuit decision is particularly noteworthy for a blistering concurrence by Judge Steven Agee.  Judge Agee agreed with the decision of the panel, noting that it “was not a close question,” but wrote separately to excoriate the EEOC for its questionable litigation tactics in the Freeman case and across this line of cases generally.  The concurrence details at length the “record of slipshod work” by the EEOC’s expert in other similar cases, including EEOC v. Kaplan Higher Education Corp., a similar ruling by the Sixth Circuit last year.  Judge Agee outlined a scathing critique of the “slapdash nature of Murphy’s work,” concluding that Murphy “undeniably cherry-picked” and perhaps even “fully intended to skew the results.”  In words that burn upon reading them, the concurrence then turned the criticism to the EEOC directly, noting that “the Commission’s conduct in this case suggests that its exercise of vigilance has been lacking.  It would serve the agency well in the future to reconsider how it might better discharge the responsibilities delegated to it or face the consequences for failing to do so.”


The Fourth Circuit’s decision is yet another stinging rebuke to the EEOC’s questionable use of statistics in challenging an employer’s use of background checks, and the opinion is another arrow in the quiver for employers defending against the EEOC in systemic litigation.

Readers can also find this post on our Workplace Class Action blog here.