By Brendan O'Brien
Jan 30 (Reuters) - A federal judge in Ohio has dismissed a
lawsuit accusing Kaplan Higher Education Corp of discriminating
against black job applicants when it rejected them based on
their credit history.
Judge Patricia Gaughan of the District Court of the Northern
District of Ohio on Monday ruled that the Equal Employment
Opportunity Commission failed to prove Kaplan caused "disparate
impact" to black applicants.
In a lawsuit filed in December of 2010, the EEOC claimed the
company's practice of rejecting job applicants based on their
credit history violated Title VII of the Civil Rights Act, since
it had an "unlawful discriminatory impact because of race and is
neither job-related nor justified by business necessity."
Gaughan said the EEOC failed to provide reliable statistical
evidence of discrimination, which is a requirement in employment
discrimination cases based on a disparate impact.
"The EEOC is reviewing the district court's decision
carefully and is considering all options," said Justine Lisser,
a spokeswoman for the agency.
In an attempt to prove Kaplan's hiring practices
discriminated against black applicants, the EEOC first needed to
establish their race, according to the judge's decision.
To do so, the agency hired Kevin Murphy, a consultant from
Lamorinda Consulting in California, to analyze the race of job
applicants, the decision said. The agency subpoenaed Department
of Motor Vehicles records from 38 states, 14 of which provided
records that identified an applicant's race.
To determine the applicants' race in the other 24 states,
Murphy assembled a team of five "race raters," according to the
decision. The raters were charged with determining the race of
the applicants by analyzing the photograph on their driver's
Gaughan wrote in her decision that the EEOC failed to
provide a statistically acceptable rate of error and failed to
show the process in which the use of "rating race" has been peer
She also wrote the agency failed to establish that proper
controls were used in the "race rating" analysis and that the
court was concerned with the lack of experience among the "race
"The expert reports and testimony provided by Dr. Murphy are
inadmissible because plaintiff fails to present sufficient
evidence that the use of 'race raters' is reliable," the
The judge added in her decision that the EEOC itself frowns
upon the very practice that it sought to rely on in this case.
"The EEOC itself discourages employers from visually
identifying an individual by race and indicates that visual
identification is appropriate 'only if an employee refuses to
self-identify,'" she wrote.
In a statement, Kaplan said its practices "mirrored what is
standard practice for many private companies and some government
The case is Equal Employment Opportunity Commission v.
Kaplan Higher Education Corp, U.S. District Court, Eastern
District of Ohio, No. 1:10 CV 2882.
For the EEOC: Debra Lawrence, Kate Northrup and Jeffrey
For Kaplan: Gerald Maatman of Seyfarth Shaw.
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