Source: http://lawspace.stmarytx.edu/item/STMU_TheScholarStMarysLRev_v12i4p0523_Concepcion
Timestamp: 2019-04-24 13:49:25+00:00

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This Article proceeds in five parts. Part II explores the purpose of the FCRA and the requirements imposed upon employers interested in procuring credit reports for the purpose of evaluating a job applicant. Part III examines the statutory framework of Title VII and explores the disparate impact the use of pre-employment credit reports has on racial minorities, who, on average, have low credit scores. Part III also discusses case law grappling with the issue of whether credit check policies violate Title VII and suggests that such policies are neither "job-related" nor "consistent with business necessity." Part IV examines pending federal and state legislation that would prohibit, with limited exceptions, the use of preemployment credit checks and proposes the enactment of such legislation. Part IV also recommends that, absent a statutory prohibition, employers voluntarily cease reliance on a measure that has no relationship to employee performance. Part V concludes by noting that the state of the current economy depends on the rectification of this problem.
* Child Advocacy Fellow, Columbia Law School, 2009-2010. J.D., Columbia Law School, 2009. 1 would like to thank the staff of The Scholar: St. Mary's Law Review on Minority Issues for their invaluable assistance in seeing this Article through to publication.
thank Robert Pagan, a personal friend and the inspiration for this Article, for pushing me to think more critically about the pervasive employment practice that is the subject of this piece.
1. Peter Baker, No Walk in the Park: For Obama One Year Later, It's the Slog of Governance, N.Y. TIMES. Nov. 4, 2009, at A19, available at 2009 WLNR 22005251. 2. Jack Healy & Keith Bradsher. Dollar Slides as Other Markets Climb, N.Y. TIMES. Oct. 7, 2009, at BI, available at 2009 WLNR 19731963. 3. This Year's Housing Crisis. N.Y. TIMES. Jan. 5, 2010, at A20. available at 2010 WLNR 168580. 4. Jobless Rates Rose in 42 States in November. N.Y. TIMES, Jan. 23, 2010, available at 2010 WLNR 1466944.
www.slcc.edu/hr/docslWorkplace-Violence-Survey.pdf (explaining that background checks, including credit checks, are often used during the hiring process "to reduce the likelihood of potential violence from employees").
context); TEX. DEP'T OF INS.. REPORT TO THE 79TH LEGISLATURE: USE OF CREDIT INFOR.
MATION 13YINSURERS IN TEXAS 13 (2004), http://www.tdi.state.tx.us/reports/documents/ creditrpt04.pdf ("In general, Blacks have an average credit score that is roughly [ten percent] to [thirty-five percent] worse than the credit scores for Whites."); U.S. EoUAL EMp.
rights issue because of the growing use of credit reports and credit scores for hiring, renting an apartment, insurance, and the fact that people of color have not been integrated into the credit scoring system as much as traditional, [Wlhite, middle-class America,'" says Evan Hendricks. author of 'Credit Scores & Credit Reports: How the System Really Works, What You Can Do."'). 9. Interview with Robert Pagan, in New York City, N.Y. (Oct. 26. 2009) (on file with The Scholar: St. Mary's Law Review on Minority Issues). Robert is only one of many racial minorities who have been affected by the increasing use of pre-employment credit checks. Provided below are the personal accounts of other racial minorities who similarly have been adversely affected by pre-employment credit check policies. Alvin Mount, who is African[-]American, worked as a transportation security screener for the U.S. Department of Homeland Security at Los Angeles International Airport. During his probationary period, his employer performed a background credit check and found he had more than $29,000 in delinquent accounts that were more than 180 days old. The published job description for the security screener position stated that a credit check revealing a default of more than $5000 in debt (excluding certain circumstances related to a previous bankruptcy) would render an employee ineligible for the position. After the employer received the results of Mount's credit check, he was terminated because of his credit problems. Lauren E. Barghols, Credit Checks and Applicants: What You Need to Know, 17 No. 9 OKLA. EMv. L. LE'VIER 4 (2009). Following his termination. Mount filed an employment discrimination complaint with the EEOC, and it was discovered that he was one of 166 airport employees who were terminated for having poor credit. Id. Lisa Bailey worked for five months at Harvard University as a temp entering donations into a database. When the university made the job a salaried position. Ms. Bailey, who is [Bilack, saw a chance to lift herself out of dead-end jobs. Bailey's supervisors encouraged her to apply, she says. but turned her down after discovering her bad credit history. Ben Arnoldy, The Spread of the Credit Check As Civil Rights Issue, CHRISnAN SCI. MONITOR, Jan. 18, 2007, at 1, available at 2007 WLNR 1000447.
Although employers have offered seemingly rational arguments for the use of credit checks, research has shown that there is practically "no relationship between credit history and performance..... This research, combined with evidence that racial minorities are more likely to have low credit scores,'' suggests that the employment of credit checks as a screening mechanism can have a disparate impact on racial minorities in violation of Title VII of the Civil Rights Act of 1964 (Title VII),12 as amended, a position long asserted by the Equal Employment Opportunity Commission. 3 Because credit reports are neither "job-related" nor "consistent with business necessity" as required by Griggs v. Duke Power Co.'4 and its progeny, the use of them to sort out the "fit" job applicants from the "unfit" should be prohibited. Pending legislation on both the federal and state levels suggests this issue will soon come to rest, but absent statutory prohibition in the near future, employers should voluntarily discontinue this practice in favor of alternative indicators of employee performance.
A poor credit history was enough to ruin Brenda Matthews' job prospects at Johnson & Johnson .... Matthews got a job as a patent specialist at Johnson & Johnson's New Brunswick, N.J., headquarters and gave her current employer notice. Two weeks later Johnson & Johnson rescinded the offer because of her credit history .... Andrea Coombes, Bad Credit Can Kill Job Offer, Pre-Employment Screening Discriminatory, Lawsuit Claims, CHARLESTON GAZEYIrE. June 19, 2004, at 6A. available at 2004 WLNR 1171735.
policies can have an unlawful disparate impact" on minorities looking for employment).
14. 401 U.S. 424, 429-31 (1971).
This Article proceeds in five parts. Part II explores the purpose of the FCRA and the requirements imposed upon employers interested in procuring credit reports for the purpose of evaluating a job applicant. Part III examines the statutory framework of Title VII and explores the disparate impact the use of pre-employment credit reports has on racial minorities, who, on average, have low credit scores. Part III also discusses case law grappling with the issue of whether credit check policies violate Title VII and suggests that such policies are neither "job-related" nor "consistent with business necessity." Part IV examines pending federal and state legislation that would prohibit, with limited exceptions, the use of preemployment credit checks and proposes the enactment of such legislation. Part IV also recommends that, absent a statutory prohibition, employers voluntarily cease reliance on a measure that has no relationship to employee performance. Part V concludes by noting that the state of the current economy depends on the rectification of this problem. If.
15. The three national credit reporting agencies are Equifax, Experian, and Trans Union. Robert B. Avery et al.. An Overview of Consumer Data and Credit Reporting, 89 FED. RES. BULL. 47, 47 n.l (2003). 16. See Elwin Griffith, The Quest for Fair Credit Reporting and Equal Credit Opportunity in Consumer Transactions, 25 U. MEM. L. REV. 37, 38-41 (1994). Initially, consumers were concerned that credit reporting agencies were gathering and circulating inaccurate information. Id. at 37. Lending practices in the 1970s forbade the disclosure of any credit information to consumers, leaving consumers with no manner with which to challenge a lender's decision. Id. at 38-39. Credit agencies further "disclaimed any guarantee of accuracy" in their credit reports. which lenders nonetheless accepted at face value. Id. 17. Fair Credit Reporting Act § 602(b), 15 U.S.C. § 1681(b) (2006).
19. See, e.g., Kelly Gallagher, Note, Rethinking the Fair Credit Reporting Act: When Requesting Credit Reports for "Employment Purposes" Goes Too Far, 91 IowA L. REV.
RES. BULL. 47, 48 (2003) (emphases omitted) (footnotes omitted). 21. Fair Credit Reporting Act § 604(a)(3)(B), 15 U.S.C. § 1681b(a)(3)(B) (2006). 22. Id. § 603(h).
versely affects any current or prospective employee,"2 4 then the employer must provide the current or prospective employee with a copy of the report and a description of her rights before taking that adverse action. Although a current or prospective employee must authorize the procurement of a credit report, employers are allowed to condition employment on that written authorization. 26 As a result, the current legal regime has permitted the securing of credit checks to develop into the widespread practice it has become.
gests that Title Vii's disparate impact provisions are unconstitutional because they mandate discriminatory compliance efforts unjustified by any compelling state interest. Ricci thus leaves the Court with a troubling dilemma it must eventually confront: either retreat from its current colorblind approach to equal protection. or rule disparate impact-a doctrine firmly ensconced in history, precedent, and congressional approval-unconstitutional. Id. Until the day on which "the war between disparate impact and equal protection [is] waged." the disparate impact analysis will continue to serve as an anti-discrimination tool. Ricci, 129 S. Ct. at 2683 (Scalia, J., concurring). In United States v. Vulcan Soc'y, Inc., a case decided after Ricci, the federal government challenged under Title VII New York City's reliance on two written examinations used to appoint entry-level firefighters. 637 F. Supp. 2d 77, 80 (E.D.N.Y. 2009). The court found that the tests resulted in a disparate impact upon African-American and Hispanic firefighters and that the city had failed to demonstrate the business necessity for such a test. Id. at 131-32. At the very outset, the court noted that Ricci did not control the outcome of the case at hand, which presented "the entirely separate question of whether ... the [clity's use of [e]xams ... has actually had a disparate impact upon [B]lack and Hispanic applicants." Id. at 83 (emphasis in original). The district court distinguished Ricci by noting that "New York City had taken significantly fewer steps than New Haven [took] in validating its examination." Id.
38. Jonathan D. Glater, Another Hurdle for the Jobless: Credit Inquiries, N.Y. TIMES, Aug. 7,2009, at AI, available at 2009 WLNR 15275381 (explaining that the "worse their debts, the harder it is to get a job to pay them off").
scores around the country and discovered that counties with relatively high proportions of racial and ethnic minorities are more likely to have lower average credit scores. 39 A Freddie Mac study similarly established a correlation between race and credit rating.' The results of these studies mirror the results reported by two states.4 1 According to the Texas Department of Insurance, "[i]n general, Blacks have an average credit score that is roughly 10% to 35% worse than the credit scores for Whites[, while] Hispanics have an average credit score that is roughly 5% to 25% worse than those for Whites. '42 Similarly, according to the Missouri Department of Insurance, "[c]redit scores are significantly correlated with minority concentration in a ZIP [c]ode, even after controlling for income, educational attainment, marital status, urban residence, the unemployment rate and other socioeconomic factors," and "race/ethnicity proved to be the most robust single predictor of credit scores ... ..
3943, at *1 (citing Gregory, 316 F. Supp. at 403).
48. EEOC Dec. No. 72-427, 1971 WL 3943, at *1.
taken based on the findings in the credit report. provide the applicant with a copy of the report. § 604(b)(2)(A), (b)(3)(A). 56. See, e.g., United States v. City of Chicago, 549 F.2d 415, 432 (7th Cir. 1977) (finding that a city police department's use of background investigations, which included credit checks, for applicants for patrolman positions had a disparate impact on minority applicants and was not related to job performance). The court conceded that a background investigation "can be a useful device in determining whether an applicant has the personal qualities required of a police officer[,]" but the particular investigation conducted by the Chicago Police Department did not meet the court's standard. Id. The department was unable to conclusively define the criteria or even specify what negative information would require disqualification of any applicant displaying undesirable characteristics. Id. More troubling were the areas from which the department could find these undesirable qualities: the investigation took into account the "applicant's social status, financial condition, arrest and driving records, military, employment and educational background, and the arrest record of his family." Id. The lack of clarity within the department's background investigation processes "[made] it impossible to determine whether the background investigation actually served to select applicants according to real differences in job-related qualifications." Id.: Dozier v. Chupka, 395 F. Supp. 836, 851-52 (S.D. Ohio 1975) (concluding that defendant fire department's background checking process was not shown to be job-related in nature and was, therefore, unlawful). The department argued that "external pressures," such as the use of drugs and alcohol, gambling, and even "poor financial risks." negatively affect how an individual performs on the job. Dozier, 395 F. Supp. at 851 (emphasis added). However, the department was unable to offer any proof that its selection criteria was actually job-related in nature. Id. at 851-52. But see Robinson v. City of Dallas, 514 F.2d 1271, 1274 (5th Cir. 1975) (finding that debt termination practices were not discriminatory). A former African-American city employee failed to establish a prima facie case that the city personnel rule authorizing the employer to punish employees who did not pay their "just debts" discriminated against African-Americans in violation of Title VII. Id. The court reasoned "that although Negros comprise a disproportionately large percentage of the poor, they do not comprise a disproportionately large percentage of the poor who do not pay their just debts." Id. at 1273. 57. Civil Rights Act of 1964 § 703(k)(1)(A)(i), 42 U.S.C. § 2000e-2(k)(I)(A)(i) (2006).
for successful performance of the job in question." 181 F.3d 478, 489 (3d Cir. 1999), cert. denied, 528 U.S. 1131 (2000). 59. Griggs, 401 U.S. at 431, 432. 60. 422 U.S. 405, 428-35 (1975). 61. Id. at 428 n.23, 431 (quoting 29 C.F.R. § 1607.4(c)).
62. Id. at 432 (citing 29 C.F.R. § 1607.4(c)(2)).
ground investigation for trooper positions, including an inquiry into the applicant's credit, was not a violation of Title VlI); Marshall v. District of Columbia, No. 74-990, 1975 WL 219, at *1, *3 (D.D.C. Aug. 6. 1975) (granting summary judgment to a police department, having found no evidence supporting an African-American policeman's claim that the department's regulation with respect to bankruptcy of applicants and employees had been discriminatorily applied on the basis of race). 64. UVB. 21 Fair Empl. Prac. Cas. (BNA) at 1402.
that the screening, interview, and hiring practices utilized by American National Bank violated Title VI1. Id. Although the court noted that the instant case was a disparate treatment case, rather than a disparate impact case (due to the EEOC's own concessions), its characterization of credit checks as consistent with business necessity is instructive. See id. at n.62. 68. Id. 69. Id. (emphasis added). 70. Id. The court reiterated that the bank is "entitled to formulate its own hiring policies and practices." Id. at *49. The nature of the banking industry and the responsibilities assigned to employees of a bank provide enough justification for banks utilizing credit checks to screen potential employees. See id.
71. Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971). 72. Jerry K. Palmer & Laura L. Koppes, Investigation of Credit History Validity at Predicting Performance and Turnover I (Apr. 3, 2004) (paper presented at the 2004 Society for Industrial and Organizational Psychology Annual Conference) (on file with The Scholar: St. Mary's Law Review on Minority Issues) (announcing employers' reasoning behind the use of credit reports prior to extending an employment offer). According to Drs. Palmer and Koppes, The first argument [made by employers] is that a credit report reflects past conscientiousness and responsibility, such as meeting deadlines and obligations, and non-procrastination. If an applicant had, in the past, frequently been late in making payments or had not paid their debts at all, the credit report would serve as an objective record of this. Unlike personality tests of conscientiousness or integrity, intentional distortion by the applicant would be unlikely in the case of the credit report. Furthermore, the best predictor of future behavior is past behavior, and a credit report, unlike a personality test, could be taken to be a more objective measure of past behavior, rather than a measurement of past behavior as recalled and reported by the applicant himself/herself. Id.; see also Jonathan D. Glater, Another Hurdle for the Jobless: Credit Inquiries, N.Y. TIMES, Aug. 7, 2009, at Al, available at 2009 WLNR 15275381 ("Business executives say that they have an obligation to be diligent and to protect themselves from employees who may be unreliable, unwise or too susceptible to temptation to steal, and that credit checks are a help."); Tiffany Hsu, Credit Checks May Be Curbed, L.A. TIMES, Sept. 9, 2009, at 1, available at 2009 WLNR 17644441 ("Companies defend the practice [of using credit checks] as a way to help verify that candidates are responsible and trustworthy."). 73. Jerry K. Palmer & Laura L. Koppes, Investigation of Credit History Validity at Predicting Performance and Turnover I (Apr. 3, 2004) (paper presented at the 2004 Society for Industrial and Organizational Psychology Annual Conference) (on file with The Scholar: St. Mary's Law Review on Minority Issues). The authors explain: [I]t could be argued that an applicant in financial trouble might be more tempted, and therefore more likely, to steal from the company .... Furthermore, it might be the case that an employee in financial trouble may be more likely to quit their job when another, better paying job opportunity arises. Id. Employee theft is certainly a growing problem. According to the Federal Bureau of Investigation, employee theft is the fastest growing crime in the country "and is expected to increase by 15% annually." Assembly Bill Analysis of A.B. 943, as amended July 9, 2009, at 3, available at http://www.leginfo.ca.gov/pub/09-10/bill/asm/ab_0901-0950/ab 943 cfa_20090908_204635_asmfloor.html. Employee theft has been estimated to cost "business owners and operators an estimated [one hundred billion dollars] worldwide each year." William 1. Sauser. Jr., Employee Theft: Who, How, Why, and What Can Be Done, S.A.M. ADVANCED MGMT. J., Summer 2007, at 13.
74. Jerry K. Palmer & Laura L. Koppes, Investigation of Credit History Validity at Predicting Performance and Turnover 1 (Apr. 3, 2004) (paper presented at the 2004 Society for Industrial and Organizational Psychology Annual Conference) (on file with The Scholar: St. Mary's Law Review on Minority Issues). According to the authors, A third argument for use of credit history in employee selection might be to avoid a negligent hiring lawsuit. Implicit in this argument is the rationale of the second reason presented above; if a person in financial trouble constitutes a higher likelihood to steal, this likelihood may present a threat to the company's clients and employees in addition to the company itself. Id. at 2 (citation omitted). 75. Id. at 4. As noted by Mr. Klein, Some employers argue that a heightened "credit history" standard is appropriate for positions that have ready access to cash or financial products. Bank tellers, for example, have the means and opportunity to steal money from the bank-their own history of financial accountability therefore must satisfy the Title VII job related and consistent with business necessity defense. But where is the proof of a correlation between a heightened propensity to steal and credit history? And if credit history is an accurate predictor of criminality, wouldn't we expect employers to monitor current employees as a prophylactic measure to guard against employee theft? The answer is that there is simply no support for the proposition that applicant (or incumbent employee) credit score or history correlates to a heightened risk for theft. And given that AfricanAmerican applicants are more likely to have bad credit, the notion of risk of theft also fosters a shameful historic racial stereotype. U.S. EoUAL EMP. OPPORTUNITY COMM'N, STATEMENT OF ADAM T. KLEIN, EsQ. (2007), http://www.eeoc.gov/eeoc/meetings/archive/5-16-07/klein.html (emphasis in original); cf Lauren E. Barghols, Credit Checks and Applicants: What You Need to Know, 17 No. 9 OKLA. EMP. L. LE-FER 4 (2009) ("[T]here is no reliable evidence linking theft, fraud, or other criminal activities to employees with negative credit reports."). But unlike the case with credit history as a predictor of employee behavior, however, there is evidence of credit history being a valid predictor of insurance losses and loan repayment. Jerry K. Palmer & Laura L. Koppes, Investigation of Credit History Validity at Predicting Performance and Turnover 2 (Apr. 3, 2004) (paper presented at the 2004 Society for Industrial and Organizational Psychology Annual Conference) (on file with The Scholar: St. Mary's Law Review on Minority Issues). 76. Jerry K. Palmer & Laura L. Koppes, Investigation of Credit History Validity at Predicting Performance and Turnover 3 (Apr. 3, 2004) (paper presented at the 2004 Society for Industrial and Organizational Psychology Annual Conference) (on file with The Scholar: St. Mary's Law Review on Minority Issues).
77. Id. at 4: see also Jerry K. Palmer & Laura L. Koppes, Further Investigation of Credit History as a Predictor of Employee Turnover I (May 30, 2003) (paper presented at the Fifteenth Annual Convention of the American Psychological Society) (on file with The Scholar: St. Mary's Law Review on Minority Issues) (finding that "credit history had no validity at differentiating between 'negative' (e.g., terminated for dishonesty) vs. 'non-negative' (e.g., sickness, relocation) reasons for leaving, and had no validity at distinguishing these employees from those who remained on the job"). 78. See discussion in footnotes 63-70 of this Article and accompanying text.
79. U.S. EoUAL EMP. OPi'ORrUNrrY COMM'N, STATEMENT OF ADAM T. KLEIN, EsQ. (2007), http:llwww.eeoc.govleeoclmeetingslarchivel5-16-O71klein.html (emphases in original). 80. Jerry K. Palmer & Laura L. Koppes, Investigation of Credit History Validity at Predicting Performance and Turnover 7 (Apr. 3, 2004) (paper presented at the 2004 Society for Industrial and Organizational Psychology Annual Conference) (on file with The Scholar: St. Mary's Law Review on Minority Issues).
For an indicator that has been afforded such weight, credit records are notoriously inaccurate and may include errors sufficiently serious to warrant denial of employment. 2 On this basis alone, the value of pre-employment credit checks as a screening mechanism should be reassessed. 83 IV.
http://www.ncrainc.org/documents/CFA%20NCRA%20Credit%2OScore%20Report.pdf ("Several organizations have conducted studies and surveys to quantify the pervasiveness of credit report errors, with widely ranging findings regarding how many credit reports contain errors (from 0.2% to 70%)."); Press Release, U.S. Pub. Int. Res. Group, One in Four Credit Reports Contains Errors Serious Enough to Wreak Havoc for Consumers (June 17, 2004), available at http://uspirg.org/uspirgnewsroom.asp?id2=13650. 83. Cf Lani Guinier & Susan Sturm, Op-Ed., Trial by Firefighters,N.Y. TIMES, July 11, 2009, at A19, available at 2009 WLNR 13218606 (advocating "a clear-eyed reassessment of our blind faith in entrenched testing regimes"). Standardized tests, like credit checks, can be misleading and often do not accurately measure relevant traits of an individual. Id.
2010). 86. H.R. 3149. 87. Press Release, U.S. Rep. Luis V. Gutierrez, Reps Gutierrez & Cohen to Announce Bill to Prevent Use of Credit Scores in Hiring Process (July 28, 2009), available at http://luisgutierrez.house.gov/PRArticle.aspx?NewslD=1389 (emphasis added).
applicant's credit history as a criteria for hiring in Michigan): H.B. 144, 95th Gen. Assem., 1st Reg. Sess. (Mo. 2009) (attempting to restrict employers' use of credit scores in employment practices in Missouri): Assem. B. 2067, 2009 Leg., 231st Sess. (N.Y. 2009) (allowing New York employers to request and consider a credit report only if the credit history is directly related to employment): S.B. 91, 128th Gen. Assem., Reg. Sess. (Ohio 2009) (proposing to make employment discrimination based on credit history unlawful in Ohio): Tex. H.B. 437, 81st Leg., R.S. (2009) (limiting Texas state agencies' use of credit checks in employment screening). The California legislature considered a bill that would prohibit employer use of consumer credit reports with some exceptions, but Governor Arnold Schwarzenegger vetoed the bill on October 11, 2009. Assem. B. 943, Reg. Sess. (Cal. 2009). According to the governor, This bill is similar to legislation I vetoed last year on the basis that California's employers and businesses have inherent needs to obtain information about applicants for employment and existing law already provides protections for employees from improper use of credit reports. As with last year's bill, this measure would also significantly increase the exposure for potential litigation over the use of credit checks. Assem. B. 943, Veto (Cal. 2009) (referring to previously vetoed Assembly Bill 2918, which was very similar to Bill 943). 95. WASH. REV. CODE § 19.182.020(2)(c) (2009). But if the information that the credit history report provides is to be used adversely by the employer, then the applicant must be provided with the contact information of the consumer reporting agency that provided the report, a detailed list of the consumer's rights regarding the procurement of credit history reports for employment purposes. and "a reasonable opportunity to respond to any information in the report that is disputed by the consumer." Id. § 19.182.020(2)(d).
96. HAW. REV. STAT. § 378-2(8) (2009). 97. Id. § 378-2.7(a)(3)-(4). An additional safeguard in Hawaii's credit discrimination legislation is that "[i]nquiry into and consideration of a prospective employee's credit history or credit report may take place only after the prospective employee has received a conditional offer of employment." Id. § 378-2.7(a)(1). Furthermore, even after a conditional offer of employment has been extended, the applicant's credit history must be "directly related to a bona fide occupational qualification." Id. 98. See discussion in Part I1I.C.1 of this Article. 99. Griggs v. Duke Power Co., 401 U.S. 424, 431 (1971). 100. See discussion in footnotes 72-74 of this Article and accompanying text. 101. See discussion in footnote 75 of this Article and accompanying text. t02. See discussion in footnotes 76-77 of this Article and accompanying text. 103. See discussion in footnote 75 of this Article and accompanying text. 104. HR Specialist: Employment Law, Prevent New Type of Lawsuit.- Credit-Check Discrimination, Bus. MGMT. DAILY, Mar. 2. 2007, http://www.businessmanagementdaily. com/articles/501 3l/Prevent-new-type-of-lawsuit-Credit-Check-discrimination/Pagel.html.
Suzanne Mahadeo, FraudBasics: White-Collar Crime Demographics.
screen out potential employee thieves by checking references, conducting background investigations, and using integrity tests; (2) create an organizational culture of character by establishing a code of conduct, setting a personal example of integrity, and showing respect for all employees: (3) remove temptations to steal by employing accounting controls, using security devices, and auditing operations and procedures; and (4) punish theft and reward honesty by disciplining or dismissing employees who steal. prosecuting criminal theft and fraud, and sharing the rewards of honest work).
107. Michael C. Sturman & David Sherwyn, The Utility of Integrity Testing for Controlling Workers' Compensation Costs, 50 CORNELL HOSPITALITY Q. 432, 432 (2009).
109. Id. [lI]t is important to note that neither researchers nor vendors claim that these tests are completely accurate. Even though the tests typically contain questions designed to catch those who are faking answers, it is highly likely that some individuals do get away with faking answers on the drug or theft questions. Thus, employers should not think that integrity tests can perfectly eliminate all undesirable behaviors. Nonetheless, integrity tests clearly can be used to screen out a large number of individuals who freely admit that they engage in behaviors that employers simply do not want in an employee. Id. at 438.
however, studies have shown that organizations that use integrity testing have received "very high returns on investment."' 14 Furthermore, though the replacement of one pre-employment screening measure with another may raise potential legal concerns, "research on integrity tests suggest[s] that adverse impact [on racial minorities] is not a significant risk."' ,5At a potential cost of $1307 per dishonest employee, "[e]nsuring that only job candidates with the highest levels of ethics and integrity are hired provides an inoculation against the detrimental impact of turbulent ' economic times on organization workforces."" 6 The bottom line: credit checks are not a valid predictor of "successful performance," as required by Griggs (and, thus, neither job-related nor consistent with business necessity), and employers should consequently discontinue the use of preemployment credit checks as a screening mechanism even absent a statutory prohibition.
(2009), http://www.vangent.co.uk/images/Vangent-Organizational Ethics-Research-Paper.pdf. 115. Michael C. Sturman & David Sherwyn, The Utility of Integrity Testing for Controlling Workers' Compensation Costs, 50 CORNELL HOSPITALITY Q. 432, 437 (2009). A recent study "based on four large databases showed that there were no significant race differences for [B]lacks, Hispanics, Asians, or American Indians compared to [W]hites." Id. (citing Deniz S. Ones & Chockalingam Viswesvaran, Gender, Age, and Race Differences on Overt Integrity Tests: Results Across Four Large-Scale Job Applicant Data Sets, 83 J. APPLIED PSYCHOL. 35-42 (1998)).
16 (2009), www.vangent.co.uk/images/Vangent-Organizational-Ethics-Research-Paper.pdf. 117. HERBERT SPENCER, THE PRINCIPLES OF BIOLOGY 444-45 (1864).
quired by Griggs, cannot be considered either "job-related" or "consistent with business necessity." Consequently, Congress should remedy this problem by amending the FCRA as currently proposed (with one exception) in the Equal Employment for All Act to limit an employer's right to procure an applicant's credit report. Alternatively, states should enact legislation that would have the same effect. Absent a federal or state statutory prohibition, however, employers should reexamine their current screening mechanisms and consider valid predictors of performance. The state of the economy depends on it.
Roberto Concepcion Jr., “Pre-Employment Credit Checks: Effectuating Disparate Impact on Racial Minorities under the Guise of Job-Relatedness and Business Necessity ,” St. Mary's Law Digital Repository, accessed April 24, 2019, http://lawspace.stmarytx.edu/item/STMU_TheScholarStMarysLRev_v12i4p0523_Concepcion.

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