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Case Name Karraker v. Rent-A-Center Inc. EE-IL-0278
Docket / Court 2:02-cv-02026-MPM ( C.D. Ill. )
State/Territory Illinois
Case Type(s) Disability Rights-Pub. Accom.
Equal Employment
Case Summary
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 ... read more >
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


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Issues and Causes of Action
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Issues
Defendant-type
Retailer
Disability
Mental impairment
Discrimination-area
Discharge / Constructive Discharge / Layoff
Medical Exam / Inquiry
Promotion
Testing
Discrimination-basis
Disability (inc. reasonable accommodations)
General
Record-keeping
Retaliation
Staff (number, training, qualifications, wages)
Test or device
Testing
Mental Disability
Mental Illness, Unspecified
Plaintiff Type
Private Plaintiff
Causes of Action State law
Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12111 et seq.
Defendant(s) Associated Personnel Technicians
Rent-A-Center Incorporated
Plaintiff Description Three current and former employees of Rent-A-Center, Inc. who were not promoted after taking the required tests, including one for psychiatric assessment, on behalf of all past and present RAC employees in Illinois who took the tests.
Indexed Lawyer Organizations None on record
Class action status sought Yes
Class action status granted Yes
Prevailing Party Plaintiff
Public Int. Lawyer No
Nature of Relief Attorneys fees
Damages
Injunction / Injunctive-like Settlement
Source of Relief Litigation
Form of Settlement None on record
Order Duration 2005 - n/a
Case Closing Year 2005
Case Ongoing No
Additional Resources
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Case Studies Megacases, Diversity, and the Elusive Goal of Workplace Reform
Written: Mar. 01, 2008
By: Nancy Levit (University of Missouri-Kansas City School of Law)
Citation: 49 B.C. L. Rev. 367 (2008)
[ Detail ] [ External Link ]

  Second Generation Employment Discrimination: A Structural Approach
By: Susan Sturm (Columbia Law School)
Citation: 101 Colum. L. Rev. 458 (2001)
[ Detail ] [ External Link ]

Docket(s)
2:02-cv-02026 (C.D. Ill.) 07/27/2009
EE-IL-0278-9000.pdf | Detail
PACER [Public Access to Court Electronic Records]
General Documents
Order 01/08/2003 (239 F.Supp.2d 828) (C.D. Ill.)
EE-IL-0278-0004.pdf | WESTLAW| LEXIS | Detail
Document Source: Westlaw
Opinion 05/06/2004 (316 F.Supp.2d 675) (C.D. Ill.)
EE-IL-0278-0001.pdf | WESTLAW| LEXIS | Detail
Document Source: Westlaw
Opinion 06/14/2005 (411 F.3d 831)
EE-IL-0278-0005.pdf | WESTLAW| LEXIS | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Opinion 08/12/2005 (2005 WL 2001511) (C.D. Ill.)
EE-IL-0278-0007.pdf | WESTLAW | Detail
Document Source: Westlaw
Opinion 11/07/2005 (2005 WL 2979652) (C.D. Ill.)
EE-IL-0278-0008.pdf | WESTLAW | Detail
Document Source: Westlaw
Opinion 05/19/2006 (431 F.Supp.2d 883) (C.D. Ill.)
EE-IL-0278-0002.pdf | WESTLAW| LEXIS | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Opinion 07/09/2007 (492 F.3d 896)
EE-IL-0278-0006.pdf | WESTLAW| LEXIS | Detail
Document Source: Westlaw
Opinion 05/02/2008 (2008 WL 1990346) (C.D. Ill.)
EE-IL-0278-0003.pdf | WESTLAW | Detail
Document Source: PACER [Public Access to Court Electronic Records]
Judges Bernthal, David G. (C.D. Ill.) [Magistrate]
EE-IL-0278-9000
Evans, Terence Thomas (E.D. Wis., Seventh Circuit)
EE-IL-0278-0005 | EE-IL-0278-0006
McCuskey, Michael Patrick (C.D. Ill.)
EE-IL-0278-0001 | EE-IL-0278-0002 | EE-IL-0278-0003 | EE-IL-0278-0004 | EE-IL-0278-0007 | EE-IL-0278-0008 | EE-IL-0278-9000
Williams, Ann Claire (Seventh Circuit, N.D. Ill.)
EE-IL-0278-0006
Monitors/Masters None on record
Plaintiff's Lawyers Leahy, Mary Lee (Illinois)
EE-IL-0278-0001 | EE-IL-0278-9000
Lesser, Seth R. (New York)
EE-IL-0278-9000
Riback, William A. (New Jersey)
EE-IL-0278-0001 | EE-IL-0278-9000
Rudich, Fran L. (New York)
EE-IL-0278-9000
Defendant's Lawyers Andrews, Jarett (Texas)
EE-IL-0278-9000
Ayers, Gary (Kansas)
EE-IL-0278-9000
Ferguson, Jana (Texas)
EE-IL-0278-9000
Geiler, Lorna K (Illinois)
EE-IL-0278-0001 | EE-IL-0278-9000
Johnson, M Brenk (Texas)
EE-IL-0278-9000 | EE-IL-0278-9000
Stanko, Glenn (Illinois)
EE-IL-0278-9000
Wright, Franklin (Texas)
EE-IL-0278-0001 | EE-IL-0278-9000
Other Lawyers None on record

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