The U.S. Court of Appeals for the Sixth Circuit upheld a district court’s award of $751,942.48 against the EEOC. This decision marks yet another significant win for employers faced with the EEOC’s “shoot-first, aim later” litigation tactics as well as yet another defeat for the EEOC in a high profile case based on an unfounded disparate impact theory of liability stemming from an employer’s use of background checks. The EEOC incorrectly alleged that Peoplemark’s policy of not hiring individuals with a criminal record had a disparate impact on African-Americans resulting in a blanket no-hire policy. The district court found that even after the EEOC knew that wasn’t the case, it proceeded with the litigation anyway. Peoplemark argued that the EEOC had deliberately caused the company to incur attorneys’ fees and expert fees when it should have known that the company did not have the blanket no-hire policy. Both a magistrate judge and district court judge agreed, finding that if the EEOC had done a reasonable investigation, it should have known that Peoplemark had, in fact, hired a number of the allegedly injured individuals. Agreeing with the district court, the Sixth Circuit held that the EEOC should be held liable for Peoplemark’s fees from October 1, 2009 through the end of the litigation.
