EEOC Sues Kaplan Over Credit Checks

Following up on a wave of aggressive lawsuits by the Equal Employment Opportunity Commission, the entity has now set its sights on Kaplan Higher Education Corporation, accusing the company of illegally denying jobs to applicants based on credit scores. The lawsuit claims that the company’s policy of requiring pre-employment credit checks has disparately affected black applicants.

The subject of credit scores as a prerequisite to employment has become the latest battlefield between employees and employers. While it is legal in certain circumstances to require credit checks, generally for positions that require the handling of large amounts of money or other peoples money, it is also often illegal to deny employment to individuals if the job functions are largely unrelated, or affects unfairly a whole class of individuals.

In this case, it appears that Kaplan’s credit check policy has had a disparate impact on potential employees who are black. The policy in many cases acts as a Catch 22 to potential employees in that they cannot get jobs as a result of poor credit, but cannot fix their credit without jobs.

We’re greatly encouraged that the EEOC has turned its attention to overly broad and discriminatory credit check policies. With more attention, employers will understand that they cannot hide behind loophole to continue such discriminatory practices, and will be held accountable for their actions.