On January 28, 2002, current and former employees, on behalf of themselves and others similarly situated, sued their employer, Rent-A-Center, Inc. (RAC), in the U.S. District Court for the Central District of Illinois, under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. and state laws. The plaintiffs, represented by private counsel, sought declaratory, injunctive, and monetary relief as well as class certification.
On March 22, 2002, the plaintiffs amended their complaint, and added Associated Personnel Technicians (APT) as a co-defendant. In their amended complaint, they challenged RAC's policy that required all employees and external applicants seeking management positions to take a series of tests, collectively referred to as the management test. They alleged that APT scored and interpreted the management test for RAC, and the results were compiled into psychological profiles, sent to the employees' immediate supervisors and placed in their personal files.
Part of the test involved questions from the Minnesota Multiphasic Personality Inventory (MMPI), a test RAC said it used to measure personality traits, but it was in fact also a psychological test that helped psychologists to diagnose and treat individuals with psychiatric disorders. RAC declined to promote any employee with more than 12 deviations reflected in the test score. The plaintiffs in this case had more than 12 deviations on the test, and were not promoted as a result.
While the discovery was still ongoing, on January 8, 2003, the District Court (Judge Michael P. McCuskey) dismissed the plaintiffs' FCRA claim and limited the scope of one of their three state claims. Karraker v. Rent-A-Ctr., Inc., 239 F. Supp. 2d 828 (C.D. Ill. 2003). In addition, the Court allowed the plaintiffs to add a claim under the Americans with Disabilities Act (ADA), 42 U.S.C. § 12111 et seq., to their second amended complaint. The Court also resolved the jurisdiction disputes about APT, and terminated the defendant CEO for lack of jurisdiction, leaving RAC and APT as the remaining defendants. The plaintiffs filed their second amended complaint on the same day.
In the second amended complaint, the ADA claims were brought by only one of the plaintiffs (the ADA plaintiff), as he was the only one who filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC). He alleged that he was discharged by RAC in retaliation for protesting the test, and that RAC's use of the MMPI as part of its testing program violated the ADA. Subsequently, the plaintiffs filed a motion for class certification, and RAC filed a motion for partial summary judgment.
On February 17, 2004, the Court granted in part and denied in part RAC's motion and entered in favor of RAC on the ADA claims of denial of promotions (based on the claim's untimeliness) and retaliation. The Court also granted in part and denied in part the plaintiffs' class certification motion. A class was certified as all past and present employees of RAC in Illinois who took the Test.
The plaintiffs and the defendants filed cross motions for summary judgment. On May 7, 2004, the Court granted summary judgment in the defendants' favor on the plaintiffs' state law claims and the administration of the test claim, while the termination claim was still pending. Karraker v. Rent-A-Ctr., Inc., 316 F. Supp. 2d 675 (C.D. Ill. 2004). The Court entered judgment in APT's favor and terminated APT from the action, leaving RAC as the only defendant. With regard to the administration of the Test claim, the Court found that RAC's use of MMPI as part of the Test was not medical examination for purposes of the ADA and thus not in violation of the ADA.
The plaintiffs appealed the summary judgment rulings to the 7th Circuit and stipulated the dismissal of the termination claim to allow the appeal to go forward. The 7th Circuit issued its decision on June 14, 2005, affirming the dismissal of the ADA claim of denial of promotions and state law claims, while reversing in part and remanding the case back to the District Court. Karraker v. Rent-A-Ctr., Inc., 411 F.3d 831 (7th Cir. 2005). The Court of Appeals, in an opinion by Judge Terence T. Evans, found that the MMPI was a medical examination under the ADA, so the summary judgment ruling could be entered in the plaintiffs' favor regarding this claim.
On remand, the District Court entered summary judgment in the plaintiffs' favor regarding the administration claim in a text order. On August 12, 2005, the Court ordered RAC to search for and removed all scores and narratives of the Test from its facilities, and not to consider those results in making any employment decision for its Illinois employees. Karraker v. Rent-A-Ctr., Inc., 2005 WL 2001511 (C.D. Ill. Aug. 12, 2005). The Court also re-opened the ADA plaintiff's termination claim by agreement of both parties.
RAC then filed a summary judgment motion, arguing that the termination claim should be dismissed under the doctrine of judicial estoppel. The Court agreed and entered summary judgment in RAC's favor regarding the termination claim on November 7, 2005. Karraker v. Rent-A-Ctr., Inc., 2005 WL 2979652 (C.D. Ill. Nov. 7, 2005). The plaintiffs petitioned for attorneys' fees and moved for compensation for class representative, the ADA plaintiff. On May 19, 2006, the Court denied the petition, holding that the plaintiffs were not the prevailing party, and granted the motion, awarding $5,000 in compensation to the ADA plaintiff. Karraker v. Rent-A-Ctr., Inc., 431 F. Supp. 2d 883 (C.D. Ill. 2006). The plaintiffs appealed the decision to the 7th Circuit.
On July 19, 2007, the 7th Circuit Court, in an opinion by Judge Evans, held that the plaintiffs were prevailing parties and thus were entitled to attorneys' fees. Karraker v. Rent-A-Ctr., Inc., 492 F.3d 896 (7th Cir. 2007). The Court vacated the denial order and remanded for a determination of a reasonable award of attorneys' fees. Judge Joel M. Flaum dissented.
On remand, the District Court awarded $155,328.85 in attorneys' fees and litigation costs to the plaintiffs and issued a final judgment. Karraker v. Rent-A-Ctr., Inc., 2008 WL 1990346 (C.D. Ill. May 2, 2008). RAC appealed to the 7th Circuit, but later voluntarily dismissed the appeal. This ended the case. Emma Bao - 08/07/2013