In what was a major blow to the Equal Employment Opportunity Commission (EEOC), the Fifth Circuit ruled in Texas v. EEOC that it exceeded its authority when it issued a guidance that limited criminal background checks in hiring. More specifically, the guidance at issue stated that Title VII prohibits employers from evaluating a job applicant on his or her criminal background under a “disparate impact” theory of liability because it disproportionately affects African-Americans and Hispanics. Although the United States District Court for the Northern District of Texas agreed with the State of Texas when it challenged the restriction, on appeal, the Fifth Circuit found that the EEOC overstepped its bounds.
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