maryland seal.bmpBy Christopher DeGroff and Gerald L. Maatman, Jr.

Recently, in EEOC v. Freeman, No. 09-CV-2573 (D. Md. Aug. 14, 2012), the U.S. District Court for the District of Maryland put the kibosh on the EEOC’s efforts to avoid depositions of its officials to inquire about their use of criminal background checks and credit histories in the EEOC’s own hiring practices. In this case, the EEOC brought suit against Defendant alleging an on-going, nationwide pattern or practice of discrimination against African-American, Hispanic, and male job applicants based on the use of criminal background checks. Now, according to Magistrate Judge Charles B. Day, Defendant may compel EEOC officials to testify about the agency’s own practices on the issue for which this suit is pending. The ruling is the second such decision to compel the EEOC to provide discovery about its own personnel practices, and as such, it is welcome news for employers for a variety of reasons.

Facts Of The Case

In EEOC v. Freeman, an African-American woman filed an EEOC charge of discrimination in January 2008, claiming that the Defendant discriminated against her on the basis of her race when it rejected her employment application based on her credit history. After the EEOC began investigating the charge, it expanded its investigation to include the Defendant’s use of criminal history information for all applicants. The parties’ attempts at conciliation were unsuccessful, and the EEOC eventually filed suit alleging a nationwide pattern or practice of discrimination based on the Defendant’s use of criminal background checks. After limited discovery, the Defendant brought a motion for partial summary judgment, which the Court granted – and about which we previously blogged about here. Defendant contended that, for claims that were not part of the original charge, the 300-day statute of limitations in Section 706 of Title VII should run – not from the date of the original charge – but from the date that the EEOC notified the company that it was expanding its investigation to encompass new claims. See EEOC v. Freeman, No. 09-CV-2573, 2011 U.S. Dist. WL 337339 (D. Md. Jan. 31, 2011). Granting partial summary judgment, Judge Titus joined a growing majority of district courts and held that the “relevant date” for purposes of the 300-day time bar is the “date of notice” of the new charges.” Id. at *14-17.

The story does not end there, however. On March 27, 2012, Defendant served the EEOC with its Notice of Rule 30(b)(6) Deposition requiring the EEOC to produce a representative to discuss a number of topics. Defendant identified key issues that it would discuss during the deposition, including: the EEOC’s policies on an employer’s use of credit history or arrest records in hiring; its “policies and justifications for considering arrest and credit records in hiring;” and the Commission’s “adjudicative procedures used during the credentialing and suitability decision making process.” EEOC v. Freeman, No. 09-CV-2573, at 2 (internal citations omitted). The EEOC argued that Defendant’s requested deposition would not reveal relevant information relevant to its claims and defenses, and the EEOC asked the Court for a protective order.

The Court’s Ruling

Noting that motions for protective orders are “regarded unfavorably” by courts, Magistrate Judge Day denied the EEOC’s motion and found that the Defendant’s deposition could produce information relevant to its argument that considering applicants’ criminal backgrounds and credit histories is a business necessity. First, the Court reasoned that if the EEOC “uses hiring practices similar to those used by Defendant, this fact may show the appropriateness of those practices, particularly because Plaintiff is the agency fighting unfair hiring practice.” Id. at 4.

Next, the Court was not persuaded by the EEOC’s argument that the Court should prohibit the deposition regarding its hiring procedures because the EEOC does “not formulate or conduct” all of its hiring procedures. Id. at 6. Rather, the Court relied on facts that show that the EEOC is – in fact – involved in the hiring process. Thus, the Court reasoned that Defendant’s depositions would provide relevant information. Id.

Finally, the Court denied the EEOC’s third, and final, contention to avoid Defendant’s deposition. To that end, the EEOC argued that a protective order was appropriate because the EEOC was deposed on similar issues in another case – EEOC v. Kaplan Higher Educ. Corp., No. 10-CV-2882 (N.D. Ohio May 26, 2011). That case is thought to be the first time the EEOC has ever been compelled to provide discovery about it own internal personnel practices. For a copy of the court order granting a similar deposition request, click here. Judge Day, however, held that the EEOC’s claim that Defendant did not need a deposition too was without merit because the Defendant did not participate in the EEOC v. Kaplan deposition and it “should not be required to rely on another party’s deposition[.]” Id. at 7. Furthermore, the Court reasoned that the Defendant’s case and EEOC v. Kaplan may involve different issues, and the Defendant “is not required to rely only on [the EEOC’s] public statements.” Id. at 7-8. Thus, finding that the EEOC did not meet its “heavy burden” to prevent the Defendant’s taking of its deposition, the Court denied its motion for a protective order.

Implications For Employers

The Magistrate Judge’s ruling is an important development in background checking law and comes on the heels of legislation that implements limits on when private and public sector employers can use consumer credit reports and background checks for employment screening purposes. As of July 1, 2012, Vermont became the eighth state to implement legislation on this “hot button” topic. Inevitably, EEOC v. Freeman and recent legislation raises the stakes for employers in this type of litigation.

Readers can also find this post on our new EEOC Countdown Blog here.