On December 21, 2010, the Equal Employment Opportunity Commission ("EEOC"), on behalf of black job applicants and incumbents, filed this lawsuit in the U.S. District Court for the Northern District Court of Ohio under Title VII of the Civil Rights Act of 1964 against Kaplan Higher Education Corporation, Kaplan, Inc., and Kaplan University. The EEOC sought injunctive relief, compensatory damages, and other forms of affirmative relief, claiming that the defendants' discriminatory selection criteria for hiring and discharge, namely its use of credit history information, had a disparate impact on black applicants and incumbents and was not job-related or consistent with business necessity.
The defendants participated in a highly regulated industry since they, as educational institutions, had to abide by the Department of Education's ("DOE") requirements and guidelines. The defendants' financial aid departments routinely utilized the National Student Loan Data System (DOE's student aid database) to access student and parent information. Prior to 2004, the defendants discovered breaches of their systems in which business officers misappropriated student payments. As a result, the defendants took additional steps to ensure compliance with financial rules and regulations, as well as DOE guidelines. Shortly thereafter, the defendants began utilizing credit history checks for applicants of certain positions, looking in particular for those who had "financial stress or burdens" that might compromise their ethical obligations.
On March 4, 2011, the defendants moved to partially dismiss the plaintiff's complaint. The District Court (Judge Patricia A. Gaughan) granted this motion on May 10. The defendants argued that employment decisions made more than 300 days before the suit was filed were time-barred. The plaintiffs argued that the continuing violations doctrine would apply here, however, the District Court disagreed and found that decisions to hire and fire were discrete, individual decisions instead of a series of connected discrete acts. 790 F.Supp.2d 619.
Over the next several months, the parties engaged in discovery, then, on March 14, 2012, the EEOC filed an amended complaint. Discovery continued, and on November 30, both parties moved for summary judgment--the defendants in full, the plaintiff in part. On January 28, 2013, Judge Gaughan granted the defendants' motion for summary judgment. The Court found that the EEOC failed to present a prima facie case of disparate impact discrimination due to its failure to provide reliable statistical evidence of employment discrimination. 2013 WL 322116. The EEOC then filed a motion for reconsideration, but Judge Gaughan denied it on May 6, 2013. 2013 WL 1891365.
On June 3, 2013, the EEOC appealed the district court's grant of summary judgment and its denial of EEOC's motion for reconsideration. The EEOC argued that by excluding their expert's testimony, the District Court abused its discretion. On April 9, 2014, the Sixth Circuit Court of Appeals (Circuit Judges Kethledge, Keith, and Cook) issued a unanimous opinion affirming the district court's holding. 748 F.3d 749.
The case is now closed.
Perry Miska - 04/07/2014
Cedar Hobbs - 02/24/2020
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