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Fourth Circuit Slaps EEOC for Use of Misleading, Incomplete and Error-Riddled Expert Testimony

    Client Alerts
  • February 27, 2015
Several years ago, the Equal Employment Opportunity Commission set discriminatory use of criminal and financial background checks as a top enforcement priority. These cases are brought under the disparate impact theory, meaning that in order to demonstrate employer liability, the EEOC must generally show meaningful statistical disparities in the number of persons in protected classifications hired after the background checks.

Last week, the Fourth Circuit Court of Appeals (which includes North Carolina and South Carolina) issued an extraordinary opinion, taking the EEOC to task for its continued use of an industrial psychologist expert witness whose work has been rejected by federal courts across the U.S. In EEOC v. Freeman, the agency retained the expert to analyze the employer’s hiring data, and whether men and African-Americans were negatively impacted by its use of the background checks during the hiring process. The expert’s resulting report concluded that the checks had resulted in a disparate impact, and the EEOC brought suit against the company on this basis.

The defendant moved to exclude the expert report as erroneous and mistake filled. The company demonstrated numerous problems with the report, including missing applicants, miscoded information, “cherry-picked” applicant information used to show the disparate impact and other errors. The trial court agreed, excluding the report and granting summary judgment to the defendant.

On appeal, the Fourth Circuit took this analysis a step forward. First, it agreed with the trial court, affirming dismissal of the claim based on problems with the EEOC’s expert report. Next, in a lengthy concurring opinion, Judge Agee chided the EEOC for its continued use of this expert after multiple federal courts across the U.S. had rejected his work as sloppy, misleading and unreliable. The judge noted the EEOC’s legal and moral obligation to use its considerable enforcement powers and resources only in a manner intended to demonstrate actual discriminatory behavior. The court directed the EEOC to reconsider its approach toward litigation practices of this type.

This case is the latest in a string of judicial decisions criticizing and/or sanctioning the EEOC for overly aggressive and sometimes misleading litigation tactics. The agency’s continued use of this discredited expert may indicate that it has problems actually demonstrating statistical disparities in these cases, or at the very least cannot find competent experts willing to advance its litigation positions. Employers sued by the EEOC for disparate impact are well served by retaining experts of their own, not only to demonstrate lack of bias in their employment practices, but to verify the competence and validity of work produced by the government’s expert witnesses.